London, Oct. 8, 2025 (Lusa) - Consultancy firm Oxford Economics on Wednesday revised downwards its growth forecast for Mozambique this year, now estimating a 1.8% expansion in Gross Domestic Product (GDP), with economic activity in negative territory.
"We now project that the economy will grow by a modest 1.8% in 2025, down from our previous forecast of 2.0%. This low-growth environment is likely to weaken private sector activity for the rest of the year, despite a favourable monetary climate," Oxford Economics analysts wrote in a commentary on the evolution of the PMI (Purchasing Managers' Index), which measures economic activity and business prospects.
The private sector, analysts add, "has struggled to regain momentum in 2025 after post-election turmoil hampered economic activity in the fourth quarter of 2024," when the economy entered recession due to violence that erupted after the election results were announced.
"Brief periods of private sector expansion have been continually interrupted by intermittent contractions as the economy struggles to stabilise," in a context where the average PMI index for the first nine months of the year is 49.7 points, below the 50 points that represent the lower limit of positive territory.
Inflation is expected to moderate to 4.5% this year, due to a stable outlook for single-digit inflation, driven in part by lower interest rates, Oxford Economics points out, warning, however, that "foreign exchange liquidity problems, weak business confidence, damaged infrastructure and the delayed financial effects of social unrest will weigh on business activity, and thus PMI indices are expected to hover around the 50-point mark in the coming months."
Mozambique's economic activity deteriorated again in September, with companies recording their first decline in sales in the last three months, according to the PMI index released on Friday by Standard Bank, which recognises that the Mozambican economy has entered recession.
Quoted in the report, Standard Bank's chief economist, Fáusio Mussá, points to September as "another month of weak performance for the private sector economy" and recalls that the Mozambican economy recorded year-on-year contractions in Gross Domestic Product (GDP) between the last quarter of 2024 and the second quarter of 2025, "which indicates a slow recovery from the impact of the post-election turmoil"
"We would not be surprised if GDP data for the third quarter of 2025 showed that this economy remains in recession. Our forecasts indicate that this economy will emerge from recession from the fourth quarter of 2025 onwards, supported mainly by favourable base effects," says Mussá.
The Purchasing Managers Index (PMI) had risen from 49.1 in June to positive territory in July, at 50.7, but in August it fell back to a negative figure, 49.9 points, and in September to 49.4.
PMI indicators above 50 points point to an improvement in business conditions compared to the previous month, while indicators below that figure show a deterioration.
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