- Mozambique’s government expects the economy to grow by 1.6% in 2027, with average inflation of 7% and a budget deficit of 4.6% of GDP.
The Government expects the Mozambican economy to grow by 1.6% in 2027, with average inflation of 7%, a budget deficit of 4.6% of GDP and the start of operations of the Development Bank of Mozambique.
The targets are set out in the proposed Economic and Social Plan and State Budget (PESOE) for 2027, which Lusa accessed today. The document establishes the Government’s economic and social priorities for next year and is still to be submitted to the Assembly of the Republic.
The proposal identifies the sustainability of public finances as a priority: “In terms of fiscal management, fiscal policy for 2027 will be guided by a prudent, credible approach and macro-fiscal discipline”.
The Government plans to mobilise total resources equivalent to 511,162 million meticais (€7,099 million), while seeking to reduce the budget deficit to 4.6% of gross domestic product (GDP) and limit the State’s recourse to domestic credit to 1.9% of GDP.
“Underpinned by this framework, the macroeconomic outlook projects real GDP growth of 1.6% in 2027, alongside a trajectory of slowing average annual inflation to 7.0%,” the proposal adds.
For 2026, economic growth of 0.6% of GDP is forecast, following a downward revision by the Government, which acknowledged an impact equivalent to 2% of GDP due to the floods at the beginning of the year.
The proposal forecasts State revenue of around 427 billion meticais (€5.9 billion), equivalent to 23.5% of GDP, while expenditure and financial operations are expected to reach approximately 511 billion meticais (€7.1 billion), corresponding to 28.1% of GDP. The budget deficit is therefore set at around 83 billion meticais (€1.2 billion), equivalent to 4.6% of GDP.
The Government describes the PESOE as “the main instrument for the Government’s economic, social and budgetary planning”, aimed at “consolidating macroeconomic stability and promoting Mozambique’s sustainable and inclusive development”.
According to the document, economic transformation will be one of the main priorities for next year, based on increasing domestic production, diversifying the economy and developing value chains.
“The Government will prioritise the operationalisation of strategic initiatives with a high multiplier impact,” the proposal states, identifying the Local Economic Development Fund (FDEL), the Fund for the Promotion of Opportunities for Women (PRO-MULHER) and the Development Bank of Mozambique (BDM) as the main instruments.
The FDEL is expected to receive an allocation of 1.5 billion meticais (€20.8 million), while PRO-MULHER will receive 500 million meticais (€6.9 million) to finance productive businesses and income generation.
The Development Bank of Mozambique, which is to be launched in 2027, is presented in the document as an instrument intended for the “financing of long-term strategic projects”, with the potential to increase production and productivity, particularly in the energy, agriculture, industry and tourism sectors.
The Government also argues that combining these mechanisms with the attraction of foreign direct investment and reforms to the business environment should help mitigate the credit constraints faced by the private sector, particularly micro, small and medium-sized enterprises.
In agriculture, considered strategic for food security and job creation, the Government plans to produce 17,600 tonnes of certified seeds, provide assistance to 1,482,451 farmers and 8,845 fishers, distribute 155,000 agricultural kits and make 100,000 multi-purpose silos available.
The plan also includes training 2,646 fish farmers, delivering 170 motorised boats, making 500 floating cages available and financing 54 fisheries projects.
Source: Lusa