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Cooling economy expected in Mozambique this year – central bank
12:45 CAT | 29 Apr 2019
File photo: Lusa
Internal public debt in Mozambique – in the form of treasury bills, treasury obligations and the so-called Central Bank advances – has reached increasingly unsustainable levels.
The current stock of this debt amounts to 122.2 billion meticais, a worsening of about 2.2 billion meticais. This deterioration, however, does not take into account other debt factors, such as mutual contracts and leasing, the Bank of Mozambique indicates.
On macroeconomic prospects, the central bank forecasts a cooling of economic growth this year, due to the impact of the cyclone that devastated the central region of the country in March.
Meeting on Thursday, the Bank of Mozambique’s Monetary Policy Committee (CPMO) decided to maintain the benchmark interest rate at 14.25%.
The decision is based on the fact that the current medium-term outlook points to a “slight worsening of inflation projections towards the end of the year”, which will however not jeopardise macroeconomic stability.
According to the central bank, this slight acceleration in the cost of living is the result mainly of supply-side shock caused by the natural disasters afflicting Mozambique recently, coupled with the metical’s depreciating trend in the domestic exchange market and the increase the price of fuel in the international market.
Despite this worsening in the cost of living, the Bank of Mozambique nonetheless believes that inflation will remain in single figures.
By Edson Arante
Source: O País
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