Mozambique plans to cut public spending in 2024 but estimates a deficit of 10.4%

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Mozambique plans to cut public spending in 2024 but estimates a deficit of 10.4%

2:28 CAT | 18 Oct 2023

File photo: Lusa

The Mozambican government plans to cut total public expenditure by 0.5 percentage points in 2024, maintaining the pace of “fiscal consolidation”, but nonetheless forecasts a budget deficit of 10.4% of gross domestic product (GDP).

In documents supporting the proposal for the State Budget Economic and Social Plan (PESOE) for 2024, which Lusa accessed on Wednesday, the government assumes the “objective of maintaining the pace of fiscal consolidation and improving the sustainability parameters of the public debt, in the medium term”.

“PESOE 2024 maintains the restrictive course of budgetary policy – a reduction in the level of total expenditure as a percentage of GDP of around 0.5 percentage points,” the document reads.

“Improving fiscal sustainability in the medium term will create conditions to safeguard macroeconomic and gradual stability” which will be discussed and then voted on at the VIII ordinary session of parliament in Maputo from October 19th to December 21st.

According to the 2024 State Budget draft , Mozambique will next year have a budget deficit of 159,488.5 million meticais (€2,359 million), corresponding to 10.4% of GDP.

The government expects to collect 383,537.5 million meticais (€5,673 million) in state revenues next year, corresponding to 25% of estimated 2024 GDP, while expenditure will have a weight of 35.2% of GDP: 542,695.6 million meticais (€8,028 million).

Source: Lusa