The Bank of Mozambique (BM) warns of the high level of domestic debt with the debt increasing from 139.5 billion Meticals in December 2019 to 248.2 billion Meticals in July 2022.

"Domestic public debt remains high. Domestic public debt, excluding loan and lease contracts and overdue liabilities, stands at 248.2 billion meticais, which represents an increase of 29.4 billion compared to December 2021," warns the WB, quoted by "O País".

In almost three years the internal debt has grown by 108.7 billion meticais, which reveals a tendency of growing indebtedness despite the high interest rates applied by the financing agents.

At the close of 2019, state debt stood at just over 139 billion meticais, equivalent to 14.6% of Gross Domestic Product. In July, the value of public debt skyrocketed to around 248 billion, or 24.0% of GDP.

These current high debt levels place the state in competition with the private sector. This conditions the levels of investment made in the national economy by companies.

"The timid growth of credit to the private sector continues to constrain the recovery of consumption and investment in this sector, which may grow at a slower pace relative to the other components of aggregate demand and with a reduced impact on inflation."

According to the WB, from January to July this year, the state's internal debt increased by 29.3 billion meticais, to 248.2 billion, in a scenario in which the increase in interest rates led several creditors to prefer lending money to the state.