“In 2021, growth recovered from the 1.2% recession in 2020, the first in three decades, and grew by 2.3%, based on a robust agricultural sector and the recovery of the services sector; for this year, we expect the economy to continue to strengthen, despite the deteriorating economic environment, and grow by 3.8%,” Luc Eyraud said.
Speaking to Lusa following the Regional Economic Forecasts for Sub-Saharan Africa, released last week in Washington as part of the Annual Meetings of the International Monetary Fund (IMF) and the World Bank, the head of the division that produces this report said that “the authorities have managed economic policies prudently” and stressed that “despite the pandemic shocks and security problems in the north of the country, fiscal pressures have been contained.”
The 3.8% growth, against a backdrop of interest rate hikes by the central bank to keep inflation under control despite being in double digits, comes even as import prices for fuel have risen, a cost the government has decided to pass on gradually to consumers, but by launching programs to help the most vulnerable families and public transport passengers.
In the medium term, the IMF says “the outlook is good, with significant growth potential, including from large investments in liquefied natural gas, even though Mozambique faces significant development challenges, including those arising from climate change.”
The IMF returned to Mozambique this year after suspending budget support due to the hidden debt scandal in 2016, and has an ongoing financial assistance program worth US$460 million, about 471 million euros, aimed at creating budgetary room for government investments in human capital, climate adaptation and infrastructure.
