Mozambique Economic Forecast

Mozambique Economic Outlook

August 25, 2020

The economy shrunk at the sharpest pace in at least a decade in the second quarter due to the Covid-19 blow, which induced broad-based contractions across the major sectors (Q2: -3.3% year-on-year; Q1: +1.7% yoy). The downturn was primarily driven by a shriveling services sector, which saw activity in the hospitality industry collapse by over a third and commerce severely hampered amid travel restrictions and closure of non-essential shops. The key mining industry also languished as output contracted by over a quarter, further weighing on the outturn. Looking ahead, amid a state of emergency that was extended three times until 30 July, the government declared a second state of emergency on 5 August to further stem the spread of the virus. Although it incorporates a phased-in easing of restrictions starting 18 August, general activity is likely to take a hit again in Q3.

Mozambique Economic Growth

The Covid-19 outbreak and related containment measures are set to considerably weigh on activity this year, with output expected to decline for the first time in decades. Exports, particularly of coal and aluminum, will retreat amid subdued global demand while investment decisions could suffer due to heightened uncertainty. The government’s massive external debt burden weighs on the outlook. FocusEconomics panelists see GDP contracting 1.3% in 2020, which is down 0.4 percentage points from last month’s forecast, and growing 3.0% in 2021.

Mozambique Economy Data

2015 2016 2017 2018 2019
Population (million)28.028.829.530.331.2
GDP per capita (USD)579417449484483
GDP (USD bn)16.212.013.314.715.0
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)-6.7-5.5-3.2-7.1-0.2
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
standing lending facility (%, eop)-  -  -  -  -  
Exchange Rate (vs USD)46.9771.3858.5361.5862.43
Exchange Rate (vs USD, aop)39.3962.7863.4360.4562.45
Current Account (% of GDP)-36.9-32.1-19.5-30.6-20.1
Current Account Balance (USD bn)-6.0-3.8-2.6-4.5-3.0
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)2.62.13.43.13.9
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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