Africa-Press – Mozambique. The Mozambican economy experienced a 1.89% recession in the first nine months of the year, with four consecutive quarters of decline, according to data released by the National Statistics Institute (INE) on Thursday, which nevertheless points to improvements.
In its latest National Accounts report for the third quarter of 2025, the INE said that gross domestic product at market prices (GDPmp) fell by 0.85% compared to the same period in 2024.
“Throughout the year, there has been economic improvement, with a total of -1.89%,” it added, referring to the 5.68% decline in GDPmp in the fourth quarter of 2024 and 3.92% and 0.94% declines in the first and second quarters of 2025.
The last period of economic growth was recorded before the general elections in October 2024, which were marked by strong social unrest in the third quarter of last year, with growth of 5.58%.
The INE added that the performance of economic activity in the third quarter “is attributed, first and foremost, to the secondary sector with a negative variation of 10.63%,” and within this “with greater emphasis on the electricity, gas and water distribution sector, with a variation of minus 31.39%,” followed by the manufacturing industry, with -4.08%, and construction, with -3.09%, also in year-on-year terms.
The tertiary sector declined by 1.51% compared to the same period last year, “driven” by the hotel and restaurant sector (-6.12%), followed by the trade and repair services sector (-5.20%), and transport, storage and transport support activities, information and communications (-3.30%), while the financial services sector grew by 1.47%.
Mozambique’s government acknowledges that the financial scenario is “substantially more adverse” than that forecast in the draft Economic and Social Plan and State Budget (PESOE) for 2026, currently being analysed in parliament, cutting growth forecasts to 1.6% this year and expected revenues in 2026.
“In the context of strengthening budgetary transparency and the sustainability of public finances, it has proved necessary to adjust macro-fiscal estimates to an economic and financial context that is substantially more adverse than that which underpinned the initial formulation of the PESOE 2026 already submitted,” the budget proposal states.
In the document, which revises the proposal initially submitted to parliament in October, the Government states that “the work carried out has revealed the need to make a downward adjustment to State revenue” of 14.9 billion meticais (€200.6 million), requiring “corresponding alignment in terms of public expenditure”.
“The revision of the PESOE 2026 proposal is based on the need to incorporate the latest developments in the national macroeconomic context, particularly concerning the revision of economic growth projections, the dynamics of tax revenue collection and the adjustment of the main budgetary variables,” it reads.
The projection for state revenue is now 406,969.4 million meticais (€5.481 billion) in 2026, equivalent to 24.9% of GDP, while state expenditure is now 520,634.2 million meticais (€7.012 billion), 31.8% of GDP, and the budget deficit remains at 113,664.9 million meticais (€1.530 billion), equivalent to 7% of GDP.
“Economic growth is projected to recover to 2.8% in 2026, compared to the forecast of 1.6% for 2025, mainly sustained by the expansion of the services sector, growth in Liquefied Natural Gas (LNG) exports, as well as the dynamism of the agricultural sector and significant investments in the energy sector,” the Government adds in the budget proposal.
The government announced on 25 November, after approval of this revision, that it will cut spending on non-priority investment projects in 2026.
Lusa
