Consulting firm Fitch Solutions forecasts the Mozambican economy to accelerate to 2.8% growth this year, well below the 5.5% average of the last decade, but recovering from last year’s 1.3% contraction.
“We anticipate that Mozambique’s GDP will grow 2.8% this year, and that the government will not implement such harsh confinement measures as those that were applied in the second quarter,” reads a commentary on data released by Mozambique’s National Institute of Statistics at the end of August, which show growth of 2% in the second quarter of this year, which follows expansion of just 0.1% in the first three months of the year, both year-on-year.
In the commentary, sent to clients of this consultancy owned by the same owners of the financial rating agency Fitch Ratings, we read that due to the easing of confinement measures, “labor market conditions will continue to gradually improve, strengthening households’ disposable income and consumer confidence, leading to a moderate recovery in private consumption.”
Public spending, add the analysts in the note to which Lusa had access, will also increase, particularly in the fight against insecurity in Cabo Delgado and the purchase of vaccines against the covid-19 pandemic, which will boost economic activity.
In addition to public spending, the recovery in Mozambique’s main exports also supports the forecast of economic recovery this year.
“National coal production is expected to recover from a 16.9% contraction in 2020 to 10.6% growth, with major mines resuming operations, and aluminum prices are also expected to see a strong rise, from $1,731 per ton to $2,300 this year, supporting a robust recovery in exports this year,” the analysts point out.
On Monday, Mozambique’s National Institute of Statistics reported that GDP grew 1.97% in the second quarter of this year compared to the same period in 2020.
It is the second consecutive quarter of growth, following a 0.12% rise in the first quarter of 2021, signaling a recovery from the crisis caused by the covid-19 pandemic.
“The performance of economic activity in the second quarter of 2021 is attributed first and foremost to the tertiary sector, which grew 2.82%, most notably the Hotel and Restaurant industry with a variation of 4.03%,” notes INE.
The State Budget for 2021 foresees a 2.1% growth in the economy, but the document was approved in late 2020, three months before the indefinite suspension of TotalEnergies’ gas project in the north of the country due to insecurity in Cabo Delgado province.
Lusa