Maputo, 4 Jul (AIM) – The effects of post-election tension and climatic shocks, over the last year, contributed to a slowdown in the growth of the annual real Gross Domestic Product (GDP), according to the Bank of Mozambique.
The central bank, in its Annual Report for 2024, claims that the post-election tension and climatic shocks (Cyclone Chido in northern provinces of Nampula and Cabo Delgado and the El Niño phenomenon) resulted in economic activity contracting by 5.7 per cent in the fourth quarter. This contributed to the growth in annual real Gross Domestic Product slowing to 2.2 per cent compared with 5.5 per cent in 2023.
The government, in order to cover the deficit on the state budget, “resorted to domestic borrowing of 113.2 billion meticais (more than double the figure for 2023), through net issues of treasury bonds (38.8 billion meticais), treasury bills (46.2 billion meticais) and financing from the Central Bank (28.1 billion meticais).”
On a more positive note, the central bank noted that the country’s annual rate of inflation slowed down, influenced by falling food and fuel prices on the international market.
“In December 2024, annual inflation slowed to 4.15 per cent after 5.3 per cent in December 023”, the report said. Relatively low inflation was in part due to the stability of the metical and the stabilization of fuel prices.
(AIM)
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