First National Bank (FNB) Mozambique, a subsidiary of the South African group FirstRand, believes that the Mozambican economy was resilient during the first half of the year, with growth of around 4.6%, much in line with initial forecasts.
According to Alfredo Mondlane, head of Economics and Market Research at the FNB, who was speaking a few days ago during a debate on Sustainable Financing, despite the various constraints – including the climatic events that affected the country at the start of the year – the Mozambican economy continued to show growth strength, highlighting that Liquefied Natural Gas (LNG) will be the major driver of the extractive sector by the end of the year.
“This year, LNG will be the driving force behind at least 90% of the growth in the extractive sector, which is mostly due to Floating Liquefied Natural Gas (FLNG), which was not produced in October last year,” he explained, quoted in a statement released by the FNB.
As for the financial sector, Alfredo Mondlane reported growth of 7% in the period in question. However, following the increase in mandatory reserve rates from 10% to 39%, the sector is now facing a liquidity challenge. “And this has translated into an additional cost of financing the economy. As a result, the sector slowed its growth in the second quarter. However, even with this slowdown, the financial sector is expected to remain resilient and continue to grow,” he stressed.
With regard to inflation, the economist expects it to worsen somewhat, but without reaching double digits, i.e. “the expectation by the end of the year is that it will be below 7%”.
