Mozambique: Growth of Mozambican Economy Will Remain Modest, Says IMF

23 April 2024
Agencia de Informacao de Mocambique (Maputo)

Maputo — The International Monetary Fund (IMF) believes that the growth of the Mozambican economy will remain modest in the coming years, since significant challenges remain.

According to Thibault Lemaire, the IMF economist responsible for coordinating the Fund's report on sub-Saharan Africa, cited by the Portuguese news agency Lusa at the end of the IMF and World Bank Annual Meetings, in Washington, "for this year and the medium term, we expect a modest recovery in growth.'

According to Lemaire, the non-mining sector in Mozambique should accelerate in 2024, driven by an improvement in the dynamics of the manufacturing and construction industries, taking into account that last year the economy showed "mixed results, with the robustness of the mining sector contrasting with the modest growth of the non-mining sector.'

For this year, the IMF predicts growth of five per cent for Mozambique, after last year's economic expansion improved to six per cent, up from 4.4 per cent in 2022.

"Mozambique's economic expansion was driven by the Coral Sul liquefied natural gas project, the country's first large-scale LNG project, but due to restrictive financial conditions, growth in the mining sector fell short of its potential', the economist said.

According to Lemaire, the French oil company TotalEnergies is expected to resume work in the northern province of Cabo Delgado "in the coming months, which will have a positive and significant impact on growth, tax revenues and the country's current account, after the start of production and LNG exports.'

Mozambique, he said, faces significant development challenges, namely the increased frequency and severity of natural disasters and climate shocks.

"In sub-Saharan Africa, growth is expected to increase from a forecast 3.4 per cent in 2023 to 3.8 per cent in 2024 and four per cent in 2025, with the negative effects of climate shocks continuing and problems in supply chains gradually improving', says the IMF.

On a global level, the IMF raised its global growth forecast by a tenth to 3.2 per cent this year, a rate it also expects for next year.

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