Mozambique to face a 3.3% recession this year

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Mozambique to face a 3.3% recession this year

1:56 CAT | 29 May 2020

File photo: Lusa

President Filipe Nyusi of Mozambique said yesterday that the country’s economy is expected to face a 3.3% recession this year due to the impact of the Covid-19 pandemic.

“We are aware of the harshness” of the measures to contain the new coronavirus, which “caused the downward revision of the economy” of Mozambique and which “implied a contraction of the same, which will translate into a negative 3.3% rate” this year, Filipe Nyusi said.

The forecast was announced by the head of state during an address to the nation in which he extended the state of emergency in the country for another 30 days.

Filipe Nyusi said that the measures envisaged in the state of emergency were intended to respond to the challenge of containing the virus and minimising the economic and social damage that mandatory confinement would cause.

“We are also aware that this package of measures has generated a resizing of sectors, including a reduction in workforce, thereby generating a negative impact on consumption and uncertainty in the medium and long term,” he added.

The head of state said the sacrifices “have not been in vain”, and that there have been some successes in fighting the pandemic, but the increase in the number of infections by the new coronavirus and its spread to all the provinces in the country indicate that the country has passed to a community transmission phase.

Compliance with restrictions imposed during the state of emergency in the coming weeks will be instrumental in controlling the spread of Covid-19, flattening the infection curve and avoiding more severe restrictions, such as mandatory confinement, he concluded.

The government and central bank have announced fiscal, monetary and customs measures, among others, to mitigate the situation, such as a general discount on the energy tariff of 10% while the state of emergency lasts – a discount raised to 50% in the case of the social tariff.

Mozambique yesterday reported its second death from Covid-19, reaching a cumulative total of 233 cases, with 82 reported totally recovered.

The state of emergency was enacted on April 1 and extended for the first time in late April, until May 30.

Mozambique has been in a state of emergency since April 1st, with amusement and leisure facilities closed, all types of events and meetings prohibited, and the public recommended to stay at home unless they have compelling reasons to go out, such as work or essential errands.

Capacity on public transport is limited and the use of masks mandatory. Schools are closed and the issuing of entry visas has been suspended.

Source: Lusa