Mozambique: Pandemic may delay gas projects – Standard Bank

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Mozambique: Pandemic may delay gas projects – Standard Bank

1:22 CAT | 27 Mar 2020

File photo: Noticias

The research department of the South African Standard Bank on Wednesday said that the Covid-19 pandemic could delay the implementation of gas projects in Mozambique’s Rovuma basin and slow growth to 2.2%.

“The Covid-19 pandemic will likely put pressure on the balance of payments due to low commodity prices, possibly delay the implementation of liquefied natural gas projects in the Rovuma basin and disruptions in economic activity,” according to analysts’ report from the economic department.

In the monthly report on African economies, sent to investors and to which Lusa had access, economists wrote that the negotiations of a financial support programme with the International Monetary Fund should also be negatively impacted and added that it is difficult to see GDP growing more than the 2.2% recorded in 2019 given the current challenges, which are compounded by security challenges.

In terms of forecast revisions, Standard Bank economists have increased the inflation estimate, which should now be 6.3% from the previously estimated 5.8% and keep the reference interest rate for bank loans at 18%.

On the exchange rate against the dollar, Standard Bank predicts a depreciation of the metical, estimating that 65.4 meticais are needed for each dollar, up from 60.7 meticais previously forecast, but they added that even if the exchange rate rises beyond 70 meticais, it will only be temporary.

The new coronavirus, responsible for the Covid-19 pandemic, has already infected more than 345,000 people worldwide, of whom more than 15,100 have died.

After it broke out in China in December, the outbreak spread worldwide, which led the World Health Organisation to declare a pandemic situation.

Source: Lusa