Maputo, 1 Jun (AIM) – The African Development Bank (AfDB) forecasts growth of 2.1 per cent in the country’s Gross Domestic Product (GDP) in the 2026 financial year and 3.5 percent in 2027.
According to African Economic Outlook report, which was presented at the AfDB annual meeting, which was held in Brazzaville, the growth will be influenced by a recovery in the extractive industry.
The meeting, which took place under the motto: “Mobilizing Development Finance at Scale in a Fragmented World”, brought together representatives from 81 member countries, including heads of state, finance ministers, planning ministers, and central bank governors.
“The 2026 growth represents an increase of 0.2 percentage points compared to 2025. This evolution will be driven by a recovery in the extractive sector, strong private consumption driven by higher incomes, and investment growth”, reads the report.
The bank also forecasts a slowdown in inflation to 5.7 percent during 2026–27 period, resulting from easing supply-side pressures, in line with the objective of the Bank of Mozambique, in its role as regulator of the national financial system, to keep inflation in single digits.
The fiscal deficit, the document says, is expected to worsen reaching 6.4 percent in 2026 and 7.0 percent in 2027, due to higher interest payments and reduced project grants. “The deficit is expected to reach 28.8 percent of GDP in 2026 and 32.7 percent in 2027”, reads the document.
The AfDB explains that the increase in imports will be “driven by higher production of liquefied natural gas and minerals, which will put pressure on the country’s external accounts in the coming years.”
According to the report, the main risks for the country’s economy are climate shocks, political instability, the armed conflict in the northern province of Cabo Delgado, and global trade tensions.
However, according to AfDB, these challenges can be mitigated through improved governance and climate resilience investment.
However, the Mozambican government had forecasted growth of 2.8 per cent in the country’s GDP in the 2026 financial year. The main contributions to growth would come from the extractive industry, with a growth rate of 4.4 per cent, services (4.1 per cent), fisheries (3.6 per cent), construction (3.2 per cent), and agriculture (2.5 per cent).
The document also points out that Africa’s economic growth will slow to 4.2 percent this year, potentially falling to 4 percent if the Middle East conflict continues.
“African countries must implement complementary reforms to improve domestic resource mobilization, notably by digitizing tax systems and broadening the tax base, as well as by improving tax administration and reducing tax evasion, which will reduce reliance on debt financing and strengthen budgetary reserves”, reads the report.
Am/
