Several economists told Lusa Wednesday, 12 October, that the government’s targets of economic growth of 5% and inflation of 11.5% for 2023 are feasible, but warned of the context of uncertainty at a global level.
The figures are part of the State Budget proposal that the Government approved last week for submission shortly to Parliament.
Estrela Charles, an economist and researcher at the Centre for Public Integration (CIP), highlighted the fact that Mozambique will start exporting natural gas from the Rovuma basin in the coming weeks. “Forecasting 5% [of GDP growth] is achievable,” he stressed, noting that the government is counting on a strong expansion of exports.
“For 2023, the government expects exports to total US$8.8 billion compared to a forecast of US$5 billion for this year, which is a significant leap,” the economist noted.
Estrela Charles advocated greater clarity in indicating the sectors that will drive the economy, so that the figures put forward by the government had greater credibility. “It is important to see which sectors are going to make production really increase by up to 5 percent,” insisting that any growth will be “concentrated in natural gas.”
Regarding the target of 11.5 per cent average annual inflation, the researcher also considered the forecast to be acceptable, given that there are no signs of a reduction in the prices of products that have deteriorated.
“What the government is trying to say or convey is that we are going to continue to have very high inflation, with a very high level of prices, which has to do with imported inflation due to our vulnerability in importing basic goods,” she explained to Lusa.
For the economist, the Bank of Mozambique has already signalled that the country will face double-digit inflation, by forecasting a reduction in net international reserves to US$2.9 billion, to cover two months of imports, compared to US$3.9 billion this year.
“What the Bank of Mozambique is saying is that in 2023 we will not have reserves to use and stabilise the exchange rate and most likely we will have a very high level of prices and a high exchange rate,” he explained.
With a lower injection of foreign currency in the market, he continued, the country will have greater difficulties in containing the cost of imports and stopping the inflationary spiral in the domestic market.
In his turn, economist Elcídio Bachita also considered the indicators assumed by the government to be appropriate, also pointing to the beginning of natural gas exports from Rovuma and foreseeing an increase in demand for coal in Europe, due to the war in Ukraine.
“This process of production and export of natural gas from Rovuma, next year, may result in tax revenues for the national treasury and will allow the State to have resources to finance the economy,” he emphasised.
Elcídio Bachita also considered that the resuming of the financial assistance of the International Monetary Fund to the country and the implementation of measures to stimulate the economy may have a visible impact.
Bachita said it was likely that TotalEnergies’ natural gas projects in Cabo Delgado province, in the north of the country, which had been suspended in 2021 following armed attacks, would also have a positive impact.
In relation to the average annual inflation rate, Bachita stressed that Mozambique is exposed to the volatility of food and fuel prices on the international market. “The country depends heavily on imports of fuel and also of food products such as rice, oil and wheat, and this also ends up influencing the prices to be charged internally,” he detailed.
