Macroeconomic Forecast Mozambique

January 2007 | Macroeconomic Forecasts

We maintain a favourable outlook on the Mozambican economy, with a stable metical and tight monetary policy starting to show benefits on the inflation front. However, major downside risks stem from the chronic budget and external account deficits. In most other countries such shortfalls would be cause for major anxiety. For Mozambique, these concerns are much less as long as the goodwill of the official international financial and donor communities is maintained. There is no reason at present to believe it will not be so, but the danger is still there. The economy seems to have coped well with high world oil prices, but there is an ever-present risk from adverse weather conditions, either in the form of drought or destructive cyclones.

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