The growth in Mozambique's real Gross Domestic Product (GDP) is forecast to accelerate from an estimated 4.1 per cent in 2022 to 6.5 per cent in 2023, largely as a result of activity in the new liquified natural gas sector, according to Fitch Solutions, a consultancy agency in the financial field.
"We see government and private consumption supporting economic growth in 2023, although high inflation will cap improvement in consumer demand", reads the document.
According to Fitch Solutions, Mozambique's current account deficit will narrow from an estimated 22.2 per cent of GDP in 2022 to 4.9 per cent in 2023 due to output from liquified natural gas (LNG).
"We forecast that the [growth in] real GDP of Mozambique will reach 6.5 per cent in 2023, as the natural gas sector will flourish, and we also foresee that government and private consumption will grow although the gains are limited by inflexion", says Fitch.
Fitch also expects that the Bank of Mozambique will hold its benchmark interest rate at the current 17.25 per cent for the rest of the year and that the exchange rate of about 64 meticais to the US dollar will remain stable.
The report also says that the armed conflict in the northern province of Cabo Delgado is the major political risk to Mozambique "but we believe that the legislation recently approved, giving power to local militia to fight the terrorists may increase marginally the counter-insurgency in the coming months."
