London, July 22, 2024 (Lusa) - Mozambique's economy is likely to grow by no more than 3.7% this year, down from last year's 5.4% and less than the previously projected rate of 4.6%, according to analysts at UK consulting form Oxford Economics.
In their note to clients, they write that although growth in mining production continues to be robust, it is slowing, in a context in which the impact of the increase in liquefied natural gas (LNG) production from the Coral South Floating LNG project is diminishing. In addition, the outlook for mining exports for the rest of the year is reduced, due to the weakness of China's economy.
In the note, the consultancy's Africa department also points out that Mozambique's annual rate of real GDP growth in the first quarter excluding primary sectors (agriculture, fisheries and mining) slowed to 2%.
On the other hand, the non-primary GDP sectors are "constrained by tight financing conditions, fiscal consolidation, security concerns in the north of the country, persistent and widespread poverty, infrastructure deficits and weak institutions."
The 3.7% economic growth forecast for this year, Oxford Economics said, will be sustained by increased foreign investment in infrastructure projects and improved private consumption, following a less restrictive monetary policy.
Mozambique's economy in the first quarter of this year showed an annual rate of growth in gross domestic product of 3.2%, slower than in all four quarters of 2023, according to the National Statistics Institute's report on national accounts, released on 11 July.
"The performance of economic activity in the first quarter of 2024 is attributed primarily to the primary sector, which grew by 4.8%, with the fishing industry standing out the most, with a variation of 11.36%," reads that report.
According to the INE report, the rate of growth in the first quarter of last yera was 6.55%, slowing to 5.87% in the second quarter, 4.39% in the third and 4.84% in the last three months of last year.
According to the government's official forecast, Mozambique GDP is expected to swell to 1.536 trillion meticais (€22.157 billion) in 2024, implying growth of 5.5%,
MBA/ARO // ARO.
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