The Mozambican economy could grow around 8 percent in 2024, strongly influenced by the exploitation of liquefied natural gas, according to projections by the International Monetary Fund (IMF).
The organization indicates that the economic prospects are based mainly on growth of 4.5 percent and 5 percent recorded in 2022 and 2023, respectively, higher than the regional average of 3.5 percent in the last two years.
The information was provided in Maputo by the IMF representative in Mozambique, Alexis Meyer-Cirkel, during the Economic and Financial Forum, an event whose objective was to reflect on investment and financing prospects for the economy.
“For 2024, in our base plan, we project a growth of 8 percent, influenced by the liquefied natural gas that started to flow. ”, said Meyer-Cirkel, quoted by the Mozambique Information Agency (AIM).
For the IMF, medium and long-term prospects point to higher growth in the country in relation to the regional average. Growth is expected to peak in 2027 and 2028, accelerating to over 10 percent.
This growth is due to the start of natural gas exploration through TotalEnergies’ Mozambique LNG project and the development of the ExxonMobil project.
On the other hand, the IMF warns that the medium and long-term perspectives indicate that the economy may face challenges due to high public spending. Therefore, it urges the Executive to work towards ensuring fiscal sustainability.
“Only a sustainable fiscal policy will allow achieving good levels of growth”, he said.
Still in the context of the vulnerabilities of the Mozambican economy, Alexis Meyer highlights the public debt, which he considers very costly, and the reason why stability is urgent to consolidate public finances.
endogenous shocks
The Deputy Minister of Economy and Finance, Carla Louveira, who also participated in the event, acknowledged that in the last five years, the national economy has been subject to endogenous and exogenous shocks due to natural disasters, the Covid-19 pandemic, terrorism in province of Cabo Delgado and, recently, the conflict between Russia and Ukraine.
In line with the IMF’s perspectives, the deputy minister said that economic growth for this year was revised upwards, reflecting new perspectives on the productive capacity of the Coral Sul natural gas project.
“Economic growth in 2023 has been revised upwards to 7 percent, reflecting new assumptions about the productive capacity of the Coral Sul LNG project,” said Carla Louveira.
The official said that, in order to maintain economic stability, the Government will continue to favor a prudent political framework of fiscal consolidation through the implementation of the Economic Acceleration Measures Package (PAE), which includes fiscal reforms and economic stimuli, as well as the development of the private sector.
