Economic recovery may not be transversal to all sectors

Mozambique recorded economic growth of 0.1% during the first quarter of 2021, a sign of having come out of recession, a growth sustained mainly by the primary sectorAccording to the latest research by Rand Merchant Bank's senior economist Daniel Kavishe.

Although the agricultural sector contributed with 23.51 QT2 to the growth of the national economy, the remaining sectors such as transport, communications, hotels and restaurants registered retractions, the mining sector stood out by presenting 18.11 QT2 of negative growth.

"We forecast that the economy will post 2.51TP2Q growth this year, considering the significant recovery shown in the first quarter," says Daniel Kavishe, senior economist at Rand Merchant Bank.

"PMI figures in Mozambique reveal that overall, business transactions increased from 49.1 to 51.3 in March and April, respectively."

A survey conducted by the National Statistics Institute revealed that companies, as well as predicting that the economy will recover over the next 12 months, in Mozambique demand will continue to be lower compared to the end of last year, mainly in the restaurant, hotel and related services sectors. Statistics also point out that confidence indicators in the transport and logistics sector currently show the lowest levels of the last three quarters, the source said.

However, according to Daniel Kavishe, based on these surveys, there is a high probability that the recovery of the Mozambican economy in 2021 will not be across all sectors.

"Based on our projections for this year, the primary sector will likely lead the positive results and the agricultural sector will also show significant gains. We also anticipate that fiscal spending will make a significant contribution in supporting the construction sector. So at this point, we maintain our annual growth forecast of 2.5% for the year 2021," said Daniel Kavishe.

Kavishe predicts that the government's recent decision in easing the restrictions associated with fighting the pandemic, will boost economic recovery in the second half of the year.

For FNBM's new Director of Corporate and Investment Banking, Janine Goosen, 2021 was a year of investment, continuing the implementation of the transformation and capacity building program as planned.

"We continue to strengthen our commitment to support the growth of the various sectors of the national economy by upgrading our digital platforms, providing excellent financial services as well as holistic solutions to our clients and their value chains to operate efficiently in the "new normal "whether domestically or internationally," reinforced Janine Goosen.

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