Mozambique: Fitch Solutions ups 2022 growth forecast to 5%

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Mozambique: Fitch Solutions ups 2022 growth forecast to 5%

9:12 CAT | 17 Feb 2022

File photo: Lusa

The consultancy Fitch Solutions on Wednesday upgraded its growth forecast for Mozambique, anticipating economic expansion of 5% this year, up from 2.8% last year, and better than the average of 4% between 2015 and 2019.

“We anticipate a strong economic recovery in Mozambique in 2022, with the lifting of social distancing measures boosting private consumption, while a more stable security environment leads to stronger investment, particularly in the hydrocarbon sector,” said the analysts at the consultancy owned by the same owners of financial ratings agency Fitch Ratings.

“We forecast growth of 5 percent in 2022, above the estimated growth of 2.8 percent in 2021 and signficantly stronger than the average of 4 percent recorded between 2015 and 2019”.

In the document, sent to clients and to which Lusa had access, Fitch Solutions noted that the signs are visible, pointing to growth of 3.4 percent in the third quarter of last year, compared to year-on-year growth of 2 percent in the previous quarter.

Analysts thus revised upwards their previous forecast, from 4.4 percent to 5 percent, “supported by signs of a return of investment and stronger exports of liquefied natural gas and placing the country comfortably above the forecasted average growth for sub-Saharan Africa of 3.8 percent.

Production of liquefied natural gas will drive rapid growth in exports, making “Mozambique a net exporter of gas for the first time in the second half of this year when Eni’s Coral South FLNG project starts producing,” which will contribute 0.6 percentage points to gross domestic product (GDP) growth this year, the analysts conclude.

Source: Lusa