Mozambique: Output growth hits one-year high in June – Standard Bank PMI

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Mozambique: Output growth hits one-year high in June – Standard Bank PMI

9:48 CAT | 07 Jul 2023

File photo: Lusa

The PMI index of Mozambican business activity improved in June compared to May, rising from 50.5 to 51.3, announced Standard Bank, which conducts the survey, consulted by Lusa on Thursday.

The PMI enters the fifth consecutive month in positive territory, reflecting “success in securing new customers ” in June that contributed to a ” a solid and accelerated rise in new orders” and an increase in employment.

“Moreover, the solid rise in output was the fastest for a year,” highlights the bank.

“Growth of activity was seen across each of the five broad sectors covered by the survey, and led by wholesale & retail,” reads the analysis of the results.

The scenario was positive despite companies reporting ” financing difficulties” to make acquisitions, with purchasing activity “scaled back for the third month running”.

In a comment on the results, Fáusio Mussá, chief economist at Standard Bank Moçambique, writes that, “should inflation continue to ease, we see the Banco de Moçambique cutting policy rates by at least 200 bps during H1:24 “.

“We see year-end inflation at 8.6% y/y this year and 6.8% y/y at the end of 20244”, he added.

The outlook “is consistent with our views that GDP temporarily eases to 3.7% y/y this year, from 4.2% y/y in 2022, accelerating towards 5.1% y/y in 2024 as LNG investment advances.””, he concluded.

The Purchasing Managers’ Index (PMI) published by Standard Bank results from the responses of purchasing directors from a panel of nearly 400 private sector companies.

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

To read, download the full text, in English, of Standard Bank Mozambique PMI, please click HERE.

Source: Lusa