Mozambique: Hotels and restaurants’ recovery influences economic growth in Q3

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Mozambique: Hotels and restaurants’ recovery influences economic growth in Q3

4:57 CAT | 15 Dec 2022

FILE - For illustration purposes only. [File photo: Carta]

The relaxation of Covid-19 prevention and containment measures in the country is already having positive effects in the hospitality sector.

Data from the National Statistics Institute (INE) indicate that, in the third quarter of 2022, Mozambique’s gross domestic product (GDP) grew by 3.6%, influenced mainly by the hotel and restaurant sectors (13.32%), extractive industry (8.81%) and transport, storage, information and communications (7.14%).

Recorded growth however remained 1% below that of the previous quarter (4.5%). For the Bank of Mozambique, the deceleration reflects the contraction observed in the secondary sector (with emphasis on the electricity sector), in a context in which the prices of commodity exports remained favourable and had an impact on the improvement of external demand, evidenced, above all, by performance in the extractive industry.

Information contained in the central bank’s recent “Economic Environment and Inflation Outlooks” report details that, in terms of components of aggregate demand, a notable increase in exports contributed to GDP growth, given the maintenance, observed until September, of high commodity prices.

“In the period in question, the value of exports of goods increased compared to the same period of the previous year, by US$ 2,455 million, of which 80% correspond to exports carried out by large projects, in a context in which imports continue to be basically justified by the entrance of the Coral Sul Floating Liquid Natural Gas (FLNG) platform project,” the central bank report reads. “In terms of products, minerals, aluminium and natural gas stand out with the greatest growth.”

The Bank of Mozambique says that, in the short term, the prospects of recovery in economic activity remain. It is expected that the execution of structuring energy projects in the country and direct support to the budget under the International Monetary Fund programme will also contribute to GDP growth. Also of note is the start, in November 2022, of exports of liquefied natural gas from the Rovuma basin.

On the external side, the Bank of Mozambique foresees, in the short term, that exports will continue to grow, favoured by the greater demand for energy products and by commodity prices on the international market which, despite tending to stabilize, remain high.

Meanwhile, economic activity is expected to prevail below its potential, in line with the evolution of the industrial production index.

By Evaristo Chilingue

Source: Carta de Moçambique