The division chief in the IMF's African Department said yesterday that Mozambique is expected to continue its economic recovery, accelerating from 1.2% in 2021 to 3.8% this year, despite the adverse international economic environment.

"In 2021, growth recovered from the 1.2% recession in 2020, the first in three decades, and grew by 2.3%, based on a robust agricultural sector and recovery in the services sector; for this year, we expect the economy to continue to strengthen, despite the deteriorating economic environment, and grow by 3.8%," said Luc Eyraud.

In an interview with Lusa following the Regional Economic Forecasts for sub-Saharan Africa, released last week in Washington as part of the Annual Meetings of the International Monetary Fund (IMF) and the World Bank, the head of the division that produces this report said that "the authorities have managed economic policies prudently" and stressed that "despite the shocks of the pandemic and security problems in the north of the country, budgetary pressures have been contained."

The 3.81TP2Q growth, against a backdrop of interest rate hikes by the central bank to keep inflation under control, despite being in double digits, comes even as fuel import prices increase, a cost the government has decided to gradually pass on to consumers, but launching programs to help the most vulnerable families and public transport passengers.

In the medium term, the IMF says that "prospects are good, with significant growth potential, including from large investments in liquefied natural gas, even though Mozambique faces significant development challenges, including those arising from climate change."

The IMF returned to Mozambique this year after suspending budget aid due to the hidden debt scandal in 2016, with an ongoing financial assistance program worth $460 million, about 471 million euros, aimed at creating budgetary room for government investments in human capital, climate adaptation, and infrastructure.

The International Monetary Fund has revised down its growth forecast for sub-Saharan Africa, now estimating growth of 3.6% and 3.7% this and next year, with inflation rising to 14.4%.

"In sub-Saharan Africa, the growth outlook is slightly worse than the July forecast, with a decline, from 4.7% in 2021, to 3.6% and 3.7% in 2022 and 2023, respectively, representing downward revisions of 0.2 and 03 percentage points," reads the World Economic Forecast report, released in Washington as part of the IMF and World Bank Annual Meetings and quoted by Lusa.

This downward revision "reflects lower growth in trading partners, tighter financial and monetary conditions, and a negative shift in the terms of trade in commodities," add IMF economists, who estimate world growth at 3.2% this year, down 0.2 percentage points from the July forecast, and a slowdown to 2.7% in 2023.

For Mozambique, the forecast is for growth of 3.7% this year and 4.9% in 2023.