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Mozambique is widely expected to notch up growth above 4% over the next few years as a major liquified natural gas (LNG) project comes online and as government spending in key areas remains strong
Mozambique is widely expected to notch up growth above 4% over the next few years as a major liquified natural gas (LNG) project comes online and as government spending in key areas remains strong.
Economists who took part in the FNB Mozambique Business Breakfast, in Maputo, recently said that despite the Russia-Ukraine war and the lingering effects of the Covid-19 pandemic, which is adding to higher oil and food prices, Mozambique’s economy is buoyant. They predicted that the economy would remain on a path of economic recovery, with key growth expected to come from the transport and logistics sector.
The increased use of Mozambique’s port was a major indicator of heightened economic activities. Haulage through South African ports is impacted by extreme weather conditions. That would lead to higher usage of the transport and storage sector in the medium term, bringing higher revenue. The primary industry is further expected to remain pivotal to growth as gas activity ramps up and as higher commodity prices boost export earnings.
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The Mozambican economy has been affected by severe weather conditions over the past few years as cyclones have devastated different parts of the economy. The restrictions imposed during the pandemic curtailed economic performance. In the meantime, Mozambique’s central bank hikes interest rates by 200bp in March concerned about inflation. Inflation presently is over 7.0% y/y in the first quarter, with food inflation having escalated. Moreover, petrol prices will put further pressure on overall inflation as well.
