Mozambique: Consultants upgrade growth expectation to 4.4% this year

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Mozambique: Consultants upgrade growth expectation to 4.4% this year

10:54 CAT | 28 Aug 2023

File photo: Lusa

Oxford Economics has revised upwards the growth outlook for Mozambique’s economy, now anticipating growth of around 4.4% due to the acceleration in the establishment of infrastructure, mainly in Cabo Delgado.

“The growth of Gross Domestic Product surprised us significantly in the first half of this year, which will lead us to increase our growth forecast for the year as a whole from 3.6% to close to 4.4%,” the analysts wrote in a commentary on the evolution of the Mozambican economy in the first six months of this year.

In the commentary sent to clients and to which Lusa has had access, the African department of British Oxford Economics writes that “the Coral South liquefied natural gas project could increase total natural gas production by up to 63%”, which, together with the reconstruction of infrastructure, supports the revision of the economy’s growth estimate.

“In addition to developments in the liquefied natural gas sector, we anticipate that investments in infrastructure related to the expansion of the electricity grid and the reconstruction of damaged infrastructure in Cabo Delgado will also support economic growth this year,” points out Oxford Economics.

The consultancy had already postponed the forecast for the resumption of TotalEnergies work from the end of this year to the first half of 2024 “due to reports that the project is facing disagreements between contractors over costs”, which means that Oxford Economics Africa foresees “a lower level of construction and spending on fixed investments in the second half of the year”, but even so, the growth in the first half of the year is enough to compensate for this reduction.

Mozambique grew by 4.7% in the second quarter of this year, accelerating from the 4.2% recorded in the first quarter of the year.

READ: Mozambique: Gas outlook brighter, TotalEnergies to resume in 2024 – BMI

BMI sees Mozambique growing 6.5% this year

Source: Lusa