Mozambique: Government needs €4.28B to finance deficit until 2027

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Mozambique: Government needs €4.28B to finance deficit until 2027

10:29 CAT | 27 Jun 2024

File photo: Lusa

Mozambique’s government estimates financing needs of 293,611 million meticais (€4.287 billion) to cover public account deficits over the next four years, according to the Medium-Term Fiscal Scenario (MTFS) until 2027.

According to the document, approved this month in the Council of Ministers and to which the Lusa news agency had access, the government acknowledges, based on current projections, a significant reduction in financing needs from 7.6 % of GDP (Gross Domestic Product) in 2023 to 5.0% in 2024, following the same trajectory to 0.9% of GDP in 2027.

For 2024, the government foresees in the document the need to finance the budget deficit, with internal and primarily external debt, of 76,459 million meticais (€1.116 billion), rising next year to almost 83,448 million meticais (€1.219 billion). In 2026, these needs will be more than 72,103 million meticais (€1.053 billion) and in 2027, almost 61,601 million meticais (€900 million).

“By prioritising external credits, the government is seeking access to financial resources with competitive interest rates, extended terms and other favourable conditions, thus reducing the pressure on domestic debt and strengthening the country’s fiscal position,” the document reads.

It adds that “this integration between the medium-term strategy, financing projections, and debt management reflects the government’s commitment to promoting prudent management of public finances, guaranteeing fiscal sustainability and promoting sustainable economic growth”.

Source: Lusa