Maputo, March 25, 2025 (Lusa) - By 2029, the Mozambican government foresees average annual economic growth of 4.6% of Gross Domestic Product (GDP) and a reduction in the public debt stock from 75% of GDP to 61%, according to a report consulted on Tuesday by Lusa.
The macroeconomic stability targets are included in the Government's Five-Year Programme (PQG) 2025-2029, the first of the executive led by President Daniel Chapo, who took office in January and which will be debated during the first parliamentary session of this legislature, which starts on Wednesday in Maputo.
The programme sets a target for state revenues to rise from 24.6% of GDP in 2024 to 25.4% in 2029, cutting state spending from 35.40% to 32.88%. In the government's forecast, the public debt stock should go from the equivalent of 74.20% of GDP in 2024 to 60.80% in 2029, based in particular on average annual economic growth of 4.6%, including Liquefied Natural Gas (LNG) projects, compared to 1.9% last year.
Among the first macroeconomic goals of the executive of Daniel Chapo, of the Front for the Liberation of Mozambique (Frelimo, in power since 1975), is also the reduction of the country's trade deficit, from 34.46% in 2024 to 13.19% in 2029.
The International Monetary Fund (IMF) argued in early March that Mozambique needs a ‘fiscal consolidation’ in 2025 to ensure the sustainability of public accounts, given the significant fiscal slippage seen in the previous year.
"Preliminary estimates suggest that there was significant fiscal slippage in 2024, which is partly explained by the slowdown in economic activity during the last quarter," said Pablo Lopez Murphy, quoted in an IMF statement on the evaluation of the Extended Credit Facility (ECF) agreement.
"Fiscal consolidation in 2025 is necessary to ensure fiscal and debt sustainability and preserve macroeconomic sustainability," added Murphy, who led the IMF team and discussions with the Mozambican authorities, including the country's president and prime minister, from 19 February to 4 March, alluding to the policies that underpin the fifth and sixth reviews under the ECF.
It also stressed that "slippages in payroll spending continue to push aside important spending priorities, including social security benefits and infrastructure", advocating the "rationalisation of payroll spending and the reduction of tax exemptions".
The IMF also pointed out that economic activity in Mozambique "contracted sharply in the last quarter of 2024, reflecting the impact of social unrest" in the context of the country's post-election protests, leading to a 4.9% drop in Gross Domestic Product (GDP) in the fourth quarter, putting overall growth last year at 1.9%.
" For 2025, growth should recover to 3.0 % as social conditions normalise and economic activity picks up, especially in services," says the IMF forecast.
PVJ/AYLS // AYLS
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