MOZAMBIQUE REVISING GROWTH FORECAST DOWNWARDS

Mozambique’s Minister of Economy and Finance, Adriano Maleiane, has accepted that the government’s target for seven per cent growth in gross domestic product (GDP) this year is likely to be beyond reach.

Speaking at the opening of a meeting of his Ministry’s Co-ordinating Council her4 Wednesday, Maleiane said it was almost inevitable that the target would be revised downwards. The main blow to the hopes for 7.0 per cent growth has been the drought in southern and central Mozambique, which has greatly reduced agricultural production.

“Right now we are re-assessing the data, taking into account, for example, that in agriculture we will have to look at the crops from the second sowings,” said Maleiane. “Clearly it will be very difficult to reach seven per cent growth, but I don’t want to put forward any numbers now, before we finish the work we are doing, assessing all the factors which serve as the basis for planning.”

Other factors pointing to a growth rate lower than hoped are the military tensions, as the Renamo rebels continue to attack vehicles on the roads in the centre of the country, and the decline in international commodity prices which has affected several of Mozambique’s main exports.

Standard Bank and the ratings agency Fitch have both predicted that the Mozambican economy will grow this year by only five per cent.

Asked about these forecasts, Maleiane said: “Each institution makes the assessment it can.”

However, he warned against excessive pessimism. He though that growth of between six and seven per cent could still be expected this year, but more work was still needed in order to produce a more reliable forecast.

Source: NNN-AIM