Mozambique: Economic activity remains low in Q1

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Mozambique: Economic activity remains low in Q1

8:07 CAT | 18 Feb 2021

FILE PHOTO - A view of Maputo. [File photo: Macauhub]

Consultant NKC African Economics says that economic activity in Mozambique will continue to decline in this quarter, after a fall of 2.4% in the last quarter of 2020 led to a 1.2% contraction last year.

“Economic activity will remain subdued in the first quarter due to the continuation of measures to contain the Covid-19 pandemic announced on January 15, the floods caused by tropical cyclone Eloise and the ongoing civil war in Cabo Delgado,” analysts at the African subsidiary of consultancy Oxford Economics write in a note released on Wednesday.

“The latest figures on the evolution of economic activity, referring to the last quarter of last year, indicate that economic growth was below expectations, after having registered relatively benign contractions in the second and third quarters due to resilient agricultural production,” they note.

Last year, the Mozambican economy shrank by 1.2%, compared to the 0.3% predicted by the same consultants, who explain the difference with resort to “a much larger contraction than expected in the last quarter of 2020”.

The decline, “the first in more than 20 years”, was driven by the Covid-19 pandemic, “but it also reflects the sustained fall in production since the hidden debt scandal and the fall in raw material prices.”

On Tuesday, Mozambique’s National Statistics Institute (INE) announced that GDP fell 1.28% in 2020, reflecting the impact of the Covid-19 pandemic.

“GDP at market prices showed a -2.37% variation in the fourth quarter of 2020 compared to the same period in the previous year and, in accumulated terms, in the four quarters of 2020, [GDP] stood at -1.28%,” the INE document reads.

The first quarter of 2020 was the only one which showed growth compared to the same period of the previous year, an increase of 1.68%. In the three remaining quarters, the economy contracted, mainly due to the restrictions imposed to contain the pandemic.

Source: Lusa