Mozambique is the country most affected by the World Bank’s new projections for 2026, with economic growth revised sharply downward from 3% to just 0.9%, against a backdrop marked by the impact of the conflict in the Middle East and widespread inflation.
In addition to the slowdown in growth, Mozambique is also facing an estimated 7.5% rise in inflation, which is driving up the cost of living and putting pressure on household purchasing power.
Across the PALOP countries, the World Bank has revised downward its growth forecasts for nearly all economies. Angola is projected to grow by 2.4% (down from the previously forecast 2.6%), while the forecast for Cape Verde was reduced from 5.2% to 4.8%. São Tomé and Príncipe also saw a significant downward revision, from 4% to 2.9%.
The exception is Guinea-Bissau, which is expected to grow by 5.3%, slightly above the previous forecast, standing out as the only country in the group to benefit from an upward revision.
Meanwhile, Equatorial Guinea is expected to slip back into recession, with a contraction of 3.5%, reversing the previous growth forecast.
The institution attributes these revisions primarily to the effects of the conflict in the Middle East, which have caused supply disruptions and rising prices, particularly in the energy sector. Angola has the highest inflation rate among the PALOP countries, at around 15%, followed by São Tomé and Príncipe, at 11%.
On average, the PALOP countries are projected to grow by just 2%, a figure well below the Sub-Saharan African average, estimated at 4.1%.
The report also warns of a more widespread slowdown in the region, noting that growth forecasts for about 60% of African countries have been revised downward for 2026.
World Bank economists also highlight the direct impact on people’s incomes. In nearly one-third of African countries, per capita income is projected to fall below 2014 levels, with particularly sharp declines in oil-dependent or conflict-affected economies such as Angola, Equatorial Guinea, and Sudan.
Despite this, about 40% of the countries in the region have higher income levels than in 2014, with some showing significant improvements.
Source: Lusa
