Mozambique government can now resume expenditure

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Mozambique government can now resume expenditure

3:42 CAT | 03 Aug 2016

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With the promulgation of the amending budget for this year by President Nyusi yesterday, the government now has the green light to resume the financing of public expenditure.

This amending budget, recently approved by Parliament, allows for the viability of the Economic and Social Plan, and was submitted to the President for verification and constitutionality checks.

The filing of an amending budget by the government was intended to accommodate the changes in some macroeconomic assumptions dictated by domestic and international factors such as the drought, political and military tension, the suspension of aid by the main program support partners and falling export product prices.

Consequently, the executive has lowered the expected gross domestic product growth from seven percent to 4.5 percent, three percentage points below the average in recent years. Other indicators suggest that inflation could reach 20 percent by the end of the year, well above the average of recent years, when the country has registered single digit values.

The amending budget, whose publication in the Government Gazette was ordered by the head of state, reflects an expense-cutting exercise in various sectors considered non-priority, resulting in savings of about 24 billion meticais, reallocated to “key areas”.

As a result of the containment measures, public expenditure will fall from 246,100 million to 243,400 million meticais, meaning an increase of 0.9 percentage points of GDP, mainly justified by the combined effect of downward adjustment of items regarding personnel and assets and services.

State revenue is expected to total 165,500 million meticais, compared to about 178,100 million in the unadjusted 2016 budget.

Source: Notícias