Africa-Press – Mozambique. The consultancy Fitch Solutions on Monday considered that the delay in natural gas investments in northern Mozambique and measures to combat the Covid-19 pandemic will mean modest real growth of 2.8% this year.
“We anticipate Mozambique’s economy to emerge from recession this year after posting a 1.3% contraction in 2020, with private investment recovering slightly, but we forecast modest real GDP growth of 2.8% as the delay in gas sector investment and the persistence of containment measures weigh on the recovery of domestic demand,” the analysts wrote.
In a note on the risks for the country, sent to investors and to which Lusa had access, the analysts from the consultancy owned by the same owners of financial rating agency Fitch Ratings also point out that the Mozambican central bank is expected to lower interest rates in the second half of the year.
“The Bank of Mozambique will likely see scope to lower the interest rate by 100 basis points to 12.25% by the end of this year, after a surprising 300 basis point hike in January, in a context of low economic growth,” the analysts said.
“On the political front, we continue to flag increasing risks to stability posed by rising insurgent activity in the northern province of Cabo Delgado, which also threatens to derail the development of new gas fields”.
In the analysis, Fitch Solutions also warns of the difficulties that Mozambique will have in terms of infrastructure, which are considered insufficient to flow all the natural gas production that is expected to start being produced from the middle of this decade.
“A failure to deal with poor infrastructure is a pressing risk for Mozambique’s economy; transport infrastructure, in particular, is currently inadequate to take the country’s rich natural resources to international markets,” the analysts said.
