More on Mozambique apex bank forecasts 12.5-14.5% inflation for 2017

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More on Mozambique apex bank forecasts 12.5-14.5% inflation for 2017

7:55 CAT | 30 May 2017

Mozambique’s central bank has predicted that the 2017 inflation could be between 12.5 and 14.5 percent while the economy is expected to grow by between three and four percent, APA learns here on Sunday. “We are assuming a realistic projection: that Mozambican GDP will grow again in a band of 3 to 4 percent, which, if it happens, means less than the expectations of the Economic and Social Plan,” central bank spokesperson Waldemar de Sousa is quoted as saying by private television Soico Televisao (Stv) on Sunday.

The official said the government’s plan projects five-percent economic growth this year.

De Sousa said it is necessary to pay attention to the risks of domestic circumstances, highlighting the political crisis that limits the potential of companies and the economy.

The recovery of International Monetary Fund (IMF) and other donors’ trust is also seen as a challenge.

“We are all anxious to see the outcome of the international debt audit. It is crucial that we have the partners back,” de Sousa said, adding that that the Mozambican state budget depends on external resources for between 50 and 60 percent of annual income on average.

Mozambique is recovering from a period of economic crisis, marked by a rise in the cost of living, strong devaluation of the metical against the dollar and suspension of direct support to the state budget by international partners.

Until recently one of Africa’s brightest prospects, Mozambique is facing its biggest economic crisis since a 16-year civil war ended in 1992 after evidence of more than $2 billion in secret loans emerged in April last year.

Problems have accelerated since the IMF and Western governments withdrew aid vital to funding the budget of the southern African nation, which gained independence from Portugal in 1975 after five centuries as a colony.

Mozambique hopes its financial saviour will be the development of huge gas reserves, which the government says would begin to flow by 2021.

Source: APA