Mozambique Economy Expected to Grow 4% in 2022, IMF Says

By George Mwangi

Special to Dow Jones Newswires

Mozambique's economy is forecast to grow by 4% in 2022, up from 2.2% this year, but remains vulnerable to the Covid-19 pandemic and terrorist attacks in the northern region of the country, the International Monetary Fund said Tuesday.

Mozambique's gross domestic product is recovering after contracting in 2020, the first contraction in three decades, the IMF said in a statement.

The forecast is based on the country's broader recovery of the non-liquefied-natural-gas economy, it said.

Mozambique is expected to become one of the world's largest LNG exporters.

"Overall growth will rise sharply as LNG projects begin production, currently expected in 2023 and 2026," IMF said.

Vulnerability to the effects of climate change and renewed deterioration of the security situation could further delay or stop LNG projects, the IMF cautioned.

Terrorist attacks have caused thousands of deaths and displaced more than 800,000 people in the natural-gas-rich north province of Cabo Delgado, with many in the northern region suffering from food insecurity, it said.

Fiscal pressures are acute in the country, the IMF said.

"While the authorities have managed the crisis prudently so far, high debt and limited financing constrain fiscal policy," it said.

Seasonal factors, supply-chain constraints, and international food and fuel price increases led inflation to rise to 6.8% year-on-year in November, remaining however within the Bank of Mozambique's target of less than 10%, the IMF said.

Write to Barcelona Editors at [e-mail]

(END) Dow Jones Newswires

12-21-21 0537ET