Oxford Economics today downgraded its forecast for Mozambique’s economic growth to 3.7 per cent this year, slowing from last year’s 5.4 per cent and below the previous forecast of 4.6 per cent.
‘Although growth in mining production continues to be robust, it is slowing, in a context in which the impact of the increase in liquefied natural gas (LNG) production from the Coral South Floating LNG project is diminishing,’ the analysts wrote, adding that ’the outlook for mining exports for the rest of the year is reduced, due to the weakness of the Chinese economy.’
In the note that revises Mozambique’s growth forecast downwards, from 4.6 per cent to 3.7 per cent this year, representing a reduction compared to the 5.4 per cent expansion recorded last year, the African department of this British consultancy also points out that ‘real GDP excluding primary sectors (agriculture, fisheries and mining) slowed to 2 per cent in the first quarter compared to the same period last year’.
On the other hand, the non-primary sectors of GDP are ‘constrained by tight financing conditions, fiscal consolidation, security concerns in the north of the country, persistent and widespread poverty, infrastructure deficits and weak institutions’.
The economic growth of 3.7 per cent forecast for this year ‘will be sustained by increased foreign investment in infrastructure projects and improved private consumption, following a less restrictive monetary policy’.
The Mozambican economy grew by 3.2% in the first quarter of the year, down from four quarters in 2023, according to the National Statistics Institute’s report on national accounts, released on 11 July.
‘The performance of economic activity in the first quarter of 2024 is attributed primarily to the primary sector, which grew by 4.8 per cent, with the fishing industry standing out the most, with a variation of 11.36 per cent,’ reads the report.
According to INE, Mozambique’s real GDP growth rate in the first quarter of 2024, at market prices, was 3.2 per cent, which contrasts with 6.55 per cent in the same period of 2023, an acceleration that slowed to 5.87 per cent in the second quarter, 4.39 per cent in the third and 4.84 per cent in the last three months of last year, the report recalls.
Mozambican GDP is expected to grow to 1.536 trillion meticals (22,157 million euros) in 2024, which corresponds to growth of 5.5 per cent, according to the government’s official forecast.
Lusa
