The Assembly of the Republic began on Wednesday, 3 December, the general discussion of the Economic and Social Plan and State Budget (PESOE) for 2026, at a time when the Government acknowledges facing a “substantially more adverse” scenario than initially forecast, both domestically and internationally, according to Lusa.
The document, whose approval is expected to be supported by the parliamentary majority of the Mozambique Liberation Front (Frelimo), sets national short-term priorities and is considered by the Government as the main instrument for economic and financial planning to promote sustainable and inclusive development.
In the revised proposal submitted to Parliament, the Government lowered the economic growth forecast for 2025 from 2.9% to 1.6%, due to a 3.9% contraction in the first quarter and a negative average of 2.4% in the first half of the year. These variations also dictated a revision of the main macro-fiscal variables.
In response, the Government cut projected State revenue for 2026 by 14.9 billion meticais (233.4 million dollars), setting the total estimate at 406.9 billion meticais (6.4 billion dollars), equivalent to 24.9% of Gross Domestic Product (GDP).
State expenditure was also adjusted, now set at 520.6 billion meticais (8.2 billion dollars), corresponding to 31.8% of GDP. The budget deficit remains unchanged at 113.6 billion meticais (1.8 billion dollars), equivalent to 7.0% of GDP.
Despite the challenging context, the Government anticipates a recovery in economic growth to 2.8% in 2026, supported by a rebound in the services sector, expansion of liquefied natural gas (LNG) exports, dynamism in agriculture, and new investments in the energy sector.
For next year, the Government forecasts goods exports worth 538.2 billion meticais (8.4 billion dollars), as well as gross international reserves of 206.3 billion meticais (3.2 billion dollars), enough to cover up to 4.4 months of goods and services imports, excluding mega-projects.
The Government also announced its decision to reduce spending on non-priority investment projects, as a way to contain public expenditure and ensure greater sustainability of State finances in a context of prolonged economic uncertainty.
