The Confederation of Mozambican Business Associations (CTA) expects that the current quarter (ending this September) will highlight an “improving trend” thanks, amongst other factors, to the easing of restrictions to combat covid-19.
This outlook, according to CTA’s Business Robustness Index, is supported by indications of a continuation of the economic recovery process, which has been underway since Q4 2021, and also thanks to the peak of the agricultural marketing season, as well as the return of entertainment and tourism activities.
“This dynamic, combined with the expected performance of macroeconomic indicators, opens space for a conservative monetary policy, with no further increases in [monetary policy] interest rates expected,” the report points out.
However, the business community believes that expectations are also favoured by the recovery of cooperation partners, which may expand the government’s fiscal space for investment spending and increase demand for goods and services, which will result in the expansion of business opportunities for the private sector.
The largest employer in Mozambique also considers, in its analysis, that the materialisation of the export of liquefied natural gas from the Coral Sul FLNG project, soon to take place, may also induce a greater volume of investment by the national business sector in its capacity building and preparation to ensure its eligibility in the supply of goods and services to the large projects, which, to a certain extent, will stimulate aggregate demand and create greater dynamism in the business sector.
However, the uncertainties surrounding the situation of insecurity in Cabo Delgado, those relating to the prolongation of the Russia-Ukraine conflict, and also those concerning the evolution of fuel and grain prices in the international market may erode this outlook.
