Mozambique: Oxford Economics lowers 2024 growth forecast to 3.7%

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Mozambique: Oxford Economics lowers 2024 growth forecast to 3.7%

1:18 CAT | 22 Jul 2024

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

This Sunday, consultancy Oxford Economics lowered its growth forecast for Mozambique’s economy to 3.7% this year, slowing down from 5.4% last year and below the previous forecast of 4.6%.

“Although mining production growth continues to be robust, it is slowing down, in a context in which the impact of increased liquefied natural gas (LNG) production from the Coral South Floating LNG project is diminishing,” the analysts write, adding that “the prospects for Minas Gerais exports for the rest of the year are reduced, due to the weakness of the Chinese economy”.

In the note that revises Mozambique’s growth forecast downwards, the African department of this British consultancy also highlights that “real GDP excluding primary sectors (agriculture, fishing and mining) slowed to 2% in the first quarter compared to the same period last year”.

On the other hand, the non-primary sectors of GDP are “limited by tight financing conditions, fiscal consolidation, security concerns in the north of the country, persistent and widespread poverty, infrastructure deficits and weak institutions”.

The 3.7% economic growth predicted for this year “will be supported by increased foreign investment in infrastructure projects and improved private consumption, following a less restrictive monetary policy”.

The Mozambican economy grew 3.2% in the first quarter of the year, below the four quarters of 2023, according to the National Statistics Institute report on national accounts, released on July 11.

“The performance of economic activity in the first quarter of 2024 is attributed, firstly, to the primary sector, which grew 4.8%, with greater emphasis on the Fishing sector, with a variation of 11.36%,” the report reads.

The real growth rate of Mozambique’s GDP in the first quarter of 2024, at market prices, was, according to INE, 3.2%, which contrasts with 6.55% in the same period of 2023, an acceleration that slowed to 5.87% in the second quarter, 4.39% in the third and 4.84% in the last three months of last year, the report recalls.

According to the government’s official forecast, Mozambican GDP is expected to grow to 1.536 billion meticais (€22,157 million) in 2024, which corresponds to growth of 5.5%.

Source: Lusa