Maputo, July 3, 2025 (Lusa) - Mozambique’s government plans to reduce the public deficit from 8% of gross domestic product (GDP) in 2024 to 2.6% in three years, according to the Medium-Term Fiscal Scenario (CFMP) that the government recently approved.
The cabinet approved the document on 24 June and Lusa accessed it on Thursday; the document states that “a significant improvement is expected” for this year, with the deficit reaching 5.6% of gross domestic product, “supported by strengthened fiscal discipline and the beginning of a recovery in revenues”.
It added that the downward trend in the public deficit “will be supported by the continuation of structural reforms, efficiency gains in revenue collection, rationalisation of expenditure and improvement in the quality and selection of public investments”.
"The projections in this CFMP indicate a gradual consolidation path over the 2026-2028 horizon, with the deficit falling to 3.2%, 3.4% and 2.6% of GDP in 2026, 2027 and 2028, respectively, in line to achieve a sustainable fiscal level.
The document estimates that public revenue should grow by an average of 0.2 percentage points of GDP per year between 2026 and 2028, “driven mainly by increased domestic tax collection, while natural gas revenues, which represent around 0.3% of GDP, will offer a growing contribution.”
The government will optimise public spending, exercising restraint in current expenditure and prioritising investment in infrastructure and social programmes to maximise the impact on inclusive growth and the reduction of inequalities. As a result, the ratio is expected to fall from 75.2% of GDP in 2025 to 70.1% in 2028.
“Public debt will fall to approximately 70% of GDP [in 2028], supported by a strategy focused on diversifying sources of financing and strengthening public debt management, ensuring fiscal sustainability and maximising financial risk management,” it also points out, recalling that the budget forecast indicates it will stand at 75.2% this year.
It also stated that the macro-fiscal objective for the period 2026 to 2028 “is to ensure the sustainability of public finances through rigorous debt management, promoting macroeconomic stability and ensuring fiscal space to finance the priorities of the Government’s Five-Year Programme”, as well as “foster inclusive economic growth, social progress and strengthen the resilience of the national economy".
“The government will gear fiscal policy towards gradual consolidation, seeking a balance between budgetary discipline and stimulating economic growth, as well as strengthening transparency and accountability in public finance management,” it points out.
It also adds that the priorities for this period “focus on the efficient mobilisation of domestic revenue, strict containment of current expenditure and strengthening the control and management of public debt, ensuring the necessary fiscal space for the strategic allocation of resources to public investments with the greatest economic and social impact”.
PVJ/ADB // ADB.
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