BMI sees Mozambique growing 6.5% this year

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BMI sees Mozambique growing 6.5% this year

9:02 CAT | 19 Jun 2023

File photo: Lusa

The consultancy Business Monitor International (BMI) forecasts that Mozambique’s economy will grow by 6.5% this year, accelerating from the 4.1% registered last year, driven by an increase in foreign investment in natural gas projects.

“We anticipate that Mozambique’s GDP [gross domestic product] will accelerate from 4.1% in 2022 to 6.5% in 2023, as we believe that the flow of foreign direct investment will increase, with the liquefied natural gas (LNG) sector leading, and in 2024 we see growth slowing to 4.2% due to a stagnation of industrial production,” the analysts proclaim.

According to the BMI, the Mozambican central bank is expected to keep the interest rate at 17.25% in the second half of this year, due to the slowdown in inflation, but “in 2024 a cut of 100 basis points is expected, to 16 .25%, with the acceleration of the slowdown in inflation and economic growth”, add the analysts.

In the note reporting the update of the main macroeconomic forecasts for the country, BMI, which returned to its previous name after being known as Fitch Solutions, also foresees that the Bank of Mozambique will continue to support the Mozambican currency at 64 meticais to the US dollar this year and the next.

On the political level, BMI forecasts point to a victory for the Mozambique Liberation Front (Frelimo, in power) candidate Filipe Nyusi, possibly accompanied by an increase in demonstrations around the presidential elections in October next year.

“We expect that there will be an increase in social protest before and after the elections due to the fact that Nyusi will run for a controversial third presidential term,” the analysis concludes.

Source: Lusa