Mozambique: FocusEconomics cuts growth forecast to 0.8%

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Mozambique: FocusEconomics cuts growth forecast to 0.8%

1:34 CAT | 22 Jul 2019

FocusEconomics has revised its growth forecast for Mozambique to 0.8% this year, down 0.8 percentage points from last month’s estimate.

“The economy is expected to lose steam this year due to the devastating impact of cyclones Idai and Kenneth. Trade and budget deficits are expected to widen due to reconstruction costs in cyclone-affected areas in the context of maintaining a high debt burden, which impairs the short-term evolution outlook,” the analysts write.

In the latest report on the African economies sent to investors, to which Lusa has enjoyed access, FocusEconomics anticipates growth of 0.8% this year, down from the 1.6% predicted last month, forecasting acceleration to 4.4% next year.

Looking at the first half of the year, FocusEconomics says “economic activity almost stopped in April compared to the first quarter average, mainly due to the decline in activity in the commercial sector”.

Consumer sentiment, although it has risen, “remained well-entrenched in pessimistic territory in April and May, below the first quarter average”. The consultancy anticipates public debt of 114.6% of GDP this year and 111.7% in 2021, starting to drop towards about 100.4% in 2023.

Source: Lusa