Friday, July 19, 2024

Mozambique aims for 5.5 per cent GDP growth in 2024

Mozambique aims to achieve Gross Domestic Product (GDP) growth of 5.5 per cent by 2024, according to information from the International Monetary Fund (IMF). In a global scenario of uncertainty, the IMF estimates a global economic growth rate of around 2.9 per cent for the same period, reflecting a slight reduction on the previous year, influenced by tighter global monetary conditions, high levels of inflation and the persistent effects of the conflict between Russia and Ukraine.

In the Mozambican context, the growth projection of 5.5 per cent in 2024 is the result of the positive performance expected in the extractive industry, agriculture and transport sectors. Ensuring a prudent and conservative monetary policy, average annual inflation is expected to remain below one digit, at 7.0 per cent.

The main macroeconomic assumptions outlined in the Economic and Social Plan and State Budget (PESOE) 2024 include:

i) Achieve GDP growth of 5.5 per cent; ii) Maintain the average annual inflation rate at around 7.0 per cent; iii) Reach USD 9,703.0 million in exports of goods; iv) Build up net international reserves (NIR) of USD 2,235.0 million, corresponding to 3 months’ coverage of imports of non-factorial goods and services, excluding mega-projects.

With the aim of sustaining fiscal consolidation and improving public debt sustainability parameters in the medium term, PESOE 2024 maintains a restrictive approach to fiscal policy. This translates into an estimated reduction of around 0.5 percentage points in the level of total expenditure in relation to GDP.

Improving fiscal sustainability in the medium term is seen as a crucial measure to safeguard macroeconomic stability and allow for gradual and sustainable growth. Despite the global challenges, Mozambique is showing resilience by adopting prudent financial strategies to face economic uncertainties.

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