Fitch Solutions foresees 3.5% growth in Mozambique this year

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Fitch Solutions foresees 3.5% growth in Mozambique this year

1:26 CAT | 11 Sep 2018

Fitch Solutions expects Mozambique’s economy to slow to 3.5% this year and 2.8% in 2019 due to lack of budget support and funding from international donors.

“These figures are below the previous decade’s average of growth rate of 6.3%, owing to a continued lack of foreign donor funding and budgetary assistance, as well as fading tailwinds from commodity exports,” the analysts write in a note on the outlook for the metical sent to investors and to which Lusa has had access.

“Our multi-year outlook sees growth picking up gradually ahead of Mozambique commencing major exports of liquefied natural gas in 2022,” write the analysts of the consultancy, which is owned by the group that also controls the rating agency Fitch.

In the note, Fitch Solutions announces that it has ” lowered its average forecasts for the metical against the US dollar to MZN60.8 for 2018 and MZN65.3/USD for 2019, from MZN61.8/USD and MZN68.5/USD, previously.

Analysts explain that “the downward revision is due to a combination of a slower than anticipated rise in inflation in the year to date and foreign reserves remaining at a healthy enough level to mitigate short term depreciatory pressures”.

Source: Lusa