EU has invested over 400 million Euros in Mozambique - AIM
in file CoM
Mozambique’s government plans to reduce the “significant budget deficit” from the equivalent of 8.1% of gross domestic product in 2023 to 1.8% by 2027, according to the Medium Term Fiscal Scenario (CFMP) approved by the executive.
According to the document, which was approved this month in cabinet and to which Lusa had access on Monday, the government recognises that “the country faces a significant budget deficit, which was 8.1% of GDP in 2023 and is expected to be 8.0% this year, “influenced by the pressures on public spending, which exceed the resources collected.
“The growing need to finance social programmes and make investments in infrastructure further aggravates the situation of public finances,” it goes on. “However, a more significant drop to 1.8% of GDP is expected by 2027, with fiscal consolidation efforts focused on expenditure containment.”
The CFMP 2025 to 2027 adds that public debt reached 73.8% of GDP in 2023, “which raised debt servicing costs to 3.1% of GDP.
“Public debt is projected to fall to 67.2% of GDP in 2024 and to continue on this downward path, reaching 60.5% of GDP in 2025. This trajectory reflects a fiscal strategy focused on primary surpluses and fiscal sustainability,” the document states.
The Medium-Term Fiscal Scenario was drawn up by the government with the aim of “translating strategic development objectives into realistic and sustainable financial projections” to provide “a solid basis for decision-making and the efficient allocation of resources.
“By projecting public revenue and expenditure for the next three years, financial challenges and investment opportunities can be identified that will help guide effective policies and the efficient allocation of resources,” the document states.
The government estimates that with measures on the tax revenue side and on the operating expenditure side it will generate gains of 8.683 billion meticais (€126.8 million) in 2025, with this rising to 16.735 billion meticais (€244.4 million) the following year and to 21.617 billion meticais (€315.6 million) in 2027.
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