Global credit ratings agency Fitch has upgraded its growth forecast for Mozambique, moving upwards to 5% from 2.8% in 2021 and still 1% higher than the average experienced between 2015 and 2019.
Fitch made this announcement through its consultancy Fitch Solutions, saying that it expects a strong economic recovery from the East African country with the lifting of social distancing measures boosting private consumption as well as a more stable security environment for stronger investment in the hydrocarbon sector. Fitch Solutions noted that the signs are visible, pointing to a growth of 3.4 per cent in the third quarter of last year, compared to year-on-year growth of 2 per cent in the previous quarter.
Analysts thus revised upwards their previous forecast, from 4.4 percent to 5 percent, “supported by signs of a return of investment and stronger exports of liquefied natural gas and placing the country comfortably above the forecasted average growth for sub-Saharan Africa of 3.8 percent.
According to Fitch, this outlook is supported by signs of a return of investment and stronger exports of liquefied natural gas and placing the country comfortably above the forecasted average growth for sub-Saharan Africa of 3.8 percent. Mozambique will become a net exporter of gas in the second quarter of 2022 when Eni’s Coral South FLNG project begins production. Mozambique’s real GDP grew by 2.2% during 2021, having grown from a contraction witnessed in 2020.
The document reads, “At Fitch Solutions, we expect a strong economic rebound in Mozambique in 2022, as the lifting of social distancing restrictions boosts private consumption, while a somewhat more stable security environment supports stronger investment, particularly into the hydrocarbon sector. Moreover, while we anticipate a ramp-up in consumer and capital imports as the economy reopens, new LNG production will see even stronger export growth. As such, we forecast real GDP growth of 5.0% in 2022, up from an estimated 2.8% in 2021 and notably stronger than the 2015-2019 average of 4.0%.”
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