Mozambique Economic Forecast

Mozambique Economic Outlook

May 26, 2020

Prospects for a robust bounce-back in activity after growth slowed to a near two-decade low in 2019 amid the devastation unleashed by cyclones Idai and Kenneth have been dashed due to the Covid-19 outbreak and associated containment measures. The government declared a state of emergency in late March for April, which has now been extended until 30 May, bringing all non-essential businesses to a halt, including the closure of mines. Thus, this will unavoidably lead to a collapse in activity in the second quarter, with ripple effects carrying over into the remainder of the year. In other news, on 8 May, Mozambique’s Constitutional Court ruled void two loans totaling more than USD 1.0 billion that were at the epicenter of the 2016 hidden debt scandal. This has further complicated the resolution of the debt issue given the lenders have sued arguing the government is liable for payment.

Mozambique Economic Growth

The economy is expected to reel this year as the coronavirus pandemic takes its toll on private consumption and investment activity. In addition, depressed commodity prices and reduced global demand are set to hit exports hard, particularly of coal and aluminum. The inevitable deterioration of an already-fragile fiscal profile is a major risk ahead. FocusEconomics panelists see GDP contracting 0.5% in 2020, which is down 1.0 percentage point from last month’s forecast, and growing 2.9% in 2021.

Mozambique Economy Data

2015 2016 2017 2018 2019
Population (million)28.028.829.530.331.2
GDP per capita (USD)579417449484-  
GDP (USD bn)16.212.013.314.7-  
Economic Growth (GDP, annual variation in %)6.73.83.73.42.2
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)-16.8-9.4-5.812.4-  
Fiscal Balance (% of GDP)-7.2-6.0-3.1-5.2-  
Public Debt (% of GDP)94.213010199.8-  
Inflation Rate (CPI, annual variation in %, eop)10.623.75.73.53.5
Inflation Rate (CPI, annual variation in %)3.619.915.13.92.8
Exchange Rate (vs USD)46.9771.3858.5361.5862.43
standing lending facility (%, eop)-  -  -  -  -  
Exchange Rate (vs USD, aop)39.3962.7863.4360.4562.45
Current Account (% of GDP)-36.9-32.1-19.5-30.6-  
Current Account Balance (USD bn)-6.0-3.8-2.6-4.5-3.1
Trade Balance (USD billion)-4.2-1.4-0.5-1.0-2.1
Exports (USD billion)3.43.34.75.24.7
Imports (USD billion)7.64.75.26.26.8
Exports (annual variation in %)-12.8-2.542.010.0-9.2
Imports (annual variation in %)-4.7-37.510.418.110.2
International Reserves (USD)2.62.13.43.1-  
External Debt (% of GDP)85.6116115104-  

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Mozambique Facts

Value Change Date
Exchange Rate62.430.48 %Jan 01
Stock Market0.10.0 %Jan 06

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