Mozambique: 2024, 2025 GDP growth estimates lowered

Login

Register

http://www.clubofmozambique.com/

Mozambique: 2024, 2025 GDP growth estimates lowered

7:59 CAT | 12 Dec 2024

File photo: Lusa

Oxford Economics has lowered its forecast for the growth of Mozambique’s economy for this year and next due to the post-election violence, now anticipating an expansion of 3.9% and 3.2% respectively.

“We have lowered our forecast for Gross Domestic Product (GDP) growth in Mozambique for this year, from 4.4% to 3.9%, and for next year we estimate a reduction in the forecast from 4.1% to 3.2%,” wrote the analysts in their most recent commentary on the evolution of the Mozambican economy.

In the analysis, sent to investors and to which Lusa has had access, the African department of this British consultancy emphasises that “the outlook for the economy is fragile due to political risks”.

The analysts warn that “without confirmation of the election results from the Constitutional Council and with a negotiated power-sharing agreement highly unlikely, the deadly post-election violence will drag on indefinitely”.

The violence in Mozambique following the announcement of the election results on 9 October “threatens the tranquillity of border and port operations, as well as the continuation of infrastructure projects financed by foreign operators”.

“There are likely to be further delays to TotalEnergies’ project in the north of the country, which is essential for the prospects of economic development in this Portuguese-speaking country,” they detail.

In the documents supporting the Economic and Social Plan of the State Budget (PESOE) for 2024, the government points to a growth in Foreign Direct Investment (FDI) to US$4.778 billion (€4.538 million), helping GDP to grow by 5.5% this year, in forecasts made before October, and therefore not taking into account the economic impact of stoppages and riots that followed the announcement of the election results.

The Mozambican government also predicted that FDI in the country would double this year, driven by the natural gas exploration business, to more than €3.5 billion, after having grown by 48% in the first half of the year, but the target seems difficult to achieve given the sharp slowdown in the last quarter of the year.

At least 110 people have died in post-election demonstrations in Mozambique since 21 October, according to an updated report released on Tuesday by the non-governmental organisation (NGO) Plataforma Eleitoral Decide.

The demonstrations, with paralyses of activities, blockades of roads, ports and border crossings, are in response to calls from presidential candidate Venâncio Mondlane after the National Electoral Commission (CNE) announced the results of the elections, in which it awarded victory to Daniel Chapo, supported by the Mozambique Liberation Front (Frelimo, the party in power since 1975) in the election for country’s president, with 70.67% of the vote.

According to the CNE, Mondlane came second with 20.32%, but it does not recognise the results, which still have to be validated and proclaimed by the Constitutional Council.

Source: Lusa