Friday, July 12, 2024

Government estimates need for 4.6 billion meticais to finance budget deficit by 2027

The Mozambican government has approved the Medium-Term Fiscal Scenario (MTFS) until 2027, highlighting that 293.6 billion meticais (equivalent to 4.6 billion dollars) will be needed to cover the budget deficit over the next four years. According to Lusa, the document presents detailed financial projections and strategies to gradually reduce the deficit.

The CFMP indicates that the budget deficit, which represents 7.6% of GDP in 2023, will be reduced to 5.0% in 2024 and will continue to decrease until it reaches 0.9% of GDP in 2027. To finance the deficit, the government forecasts 76.4 billion meticais (1.21 billion dollars) in 2024, rising to 83.4 billion meticais (1.32 billion dollars) in 2025. Financing needs will be 72.1 billion meticais (1.14 billion dollars) in 2026, falling to 61.6 billion meticais (973.7 million dollars) in 2027.

The document highlights that the government will prioritize external credits to access financial resources with competitive interest rates and extended terms, with the aim of reducing pressure on domestic debt and strengthening the country’s fiscal position. This strategic approach reflects the commitment to prudent management of public finances, seeking to ensure fiscal sustainability and promote sustainable economic growth.

In addition, the CFMP projects additional gains through fiscal measures, with expectations of 8.6 billion meticais (137.3 million dollars) in 2025, rising to 16.7 billion meticais (264.6 million dollars) in 2026 and 21.6 billion meticais (341.7 million dollars) in 2027.

“By projecting public income and expenditure for the next three years, we can identify financial challenges and investment opportunities that will help guide effective policies and allocate resources efficiently,” concludes the CFMP.

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