Mozambique: Business confidence declines for fifth consecutive quarter

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Mozambique: Business confidence declines for fifth consecutive quarter

2:47 CAT | 16 Oct 2025

File photo: Lusa

Business confidence in Mozambique has declined for the fifth consecutive quarter, reflecting ongoing pressure on demand and employment, according to the latest data released by the National Statistics Institute (INE).

The Economic Climate Indicator (ICE), which measures the sentiment of Mozambican businesses, slowed again in the third quarter of 2025, marking five straight quarters of decline. The downturn aligns with a continued fall in demand, now in its fourth consecutive quarter, and with employment expectations that have weakened for five consecutive periods.

The ICE reached 89.8 points in the third quarter, down from 90.3 points in the previous quarter, moving closer to its historic low of 81.5 points recorded in the third quarter of 2020.

INE noted that the unfavourable business climate largely reflects negative sentiment in the industrial production sector, which outweighed positive perceptions reported in trade and non-financial services during the same period.

Between July and September 2025, the indicator of demand expectations deteriorated for the fourth consecutive quarter, remaining below the long-term average.

The report says the decline was driven by a significant drop across all surveyed sectors, particularly in non-financial services and trade, where confidence fell sharply compared with the previous quarter.

The employment outlook also worsened slightly, reaching its lowest level in thirteen quarters. INE attributed this negative trend to weaker expectations across all surveyed sectors, signalling cautious hiring intentions.

The government estimates that 955 establishments were destroyed and around 50,000 people lost their jobs during the months of post-election violence between October and March. The authorities now face the challenge of preventing the economy from sliding deeper into recession.

According to the Economic Recovery and Growth Plan (PRECE), as reported on by Lusa on 30 September, the technical recession that began in late 2024 and persisted through the first half of 2025 was largely due to post-election unrest, which led to a partial paralysis of the economy and widespread layoffs.

Mozambique’s GDP growth has shown a downward trend, falling from a robust 5.58 percent in the third quarter of 2024 to minus 5.68 percent in the final quarter of the same year, as the impact of the October elections took hold.

Although the first two quarters of 2025 showed gradual recovery, with GDP shrinking by 3.92% and 0.94% respectively, the government described the situation as a technical recession requiring a strategic response to prevent a full-scale economic downturn.

The unrest, lasting nearly five months, saw protests, strikes and road blockades, mainly in Maputo, initially in protest against the 9 October election results. The demonstrations, led by former presidential candidate Venâncio Mondlane, who rejects the outcome, left around 400 people dead.

Source: Lusa