Mozambique: Consultant estimates recession for the first time in 30 years

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Mozambique: Consultant estimates recession for the first time in 30 years

1:38 CAT | 28 Sep 2020

File photo: Lusa

The consultancy FocusEconomics said that Mozambique’s economy will register a negative growth of 1.3% this year, which will be the first time this has happened in almost 30 years, due to the effects of the Covid-19 pandemic.

“The economy is expected to contract this year for the first time in almost three decades due to the consequences of the pandemic,” the analysts wrote in the most recent report on African economies.

According to the document, sent to clients and to which Lusa had access, the Mozambican economy should enter negative territory this year but should recover solidly in 2021, when it should register a growth of 2.9%.

“Exports, especially of coal and aluminium, are expected to fall due to the slowdown in external demand, and the considerable weight of public debt also harms the prospects for economic recovery,” the analysts said.

Anticipating a rise in inflation to 3.2% this year and 4.1% in 2021, FocusEconomics said that economic sentiment, which reflects the confidence of economic agents, fell again in July, the fifth consecutive month of decline and registered the worst result of the series, against a backdrop of deteriorating employment indicators, particularly in the transport and construction sectors.

Source: Lusa