Good news for Mozambique as its economic growth is set to accelerate

MAPUTO: Mozambique’s economy is expected to accelerate slightly to 6.5 percent next year after delays in investment in large natural resources projects, the International Monetary Fund (IMF) said.

Growth this year will reach 6.3 percent as China’s slowing economy hits commodity exporters, the IMF’s mission head to Mozambique, Michel Lazare said.

Economic growth stood at 9.6 percent last year, the government has said.

“Inflation is expected to increase towards 5-6 percent over the next few months,” Lazare said.

Mozambique’s inflation accelerated to 2.73 percent in September largely from the impact of the depreciation of the Mozambican currency, the metical against the dollar.

Lazare said that between 2017 to 2020 growth could average 8 percent owing to positive prospects of investments in extractive industries, especially liquefied natural gas.

The IMF team completed its visit to Mozambique on Wednesday, where it met Prime Minister Carlos Agostinho do Rosario.

The global lender recommended a continuation of the tightening cycle after the monetary policy committee raised its benchmark lending rate by 25 basis points to 7.75 percent on October 14.

“The team believes that the authorities’ economic programme, together with the agreed policy package, is strong and adequate to respond to the temporary external shocks that the Mozambique economy is going through at the moment,” Lazare said. – Reuters