Business activity in Mozambique continues to recover from the various phenomena affecting economic stability. According to the Business Strength Index released this Thursday, August 5, by the Confederation of Business Associations of Mozambique (CTA), the business performance showed some traction in the second quarter of the current year compared to the first quarter, having increased by one percentage point, from 27% to 28%.
According to CTA president Agostinho Vuma, the main drivers of this increase were the start of the agricultural marketing campaign, exports of products such as cotton and shrimp, and the improved performance of the tourism sector mainly in provinces such as Inhambane and Manica.
“This performance was not more pronounced because of the impacts of the increase in fuel prices whose effects were directly reflected in the transport sector, a sector that also faced the rise in maintenance costs. It is important to note that this sector has a transmission effect on the economy, which has led to the aggravation of goods’ prices”, Vuma said during the presentation of the 9th edition of the Economic Briefing, in Chibuto, province of Gaza, in the South of the country.
The report also points to an improvement in the employment index during the period under review. Still, for the private sector, the labor market remains fragile and there is a preference for hiring temporary or part-time labor, especially in the sectors of agriculture and construction.
Thus, the business community believes that business activity in the third quarter may continue on an upward trend. However, “there is the risk of an environment characterized by persistent high prices of goods and services whose impact may be the reduction of demand and, consequently, the retraction of operating profits.