Around 60 meticais during

Standard Bank’s economic studies department said today that below-potential economic activity and low import demand would keep the value of the dollar at around 60 meticais this year.

“Declining economic activity and a low demand for imports have contributed to the fact that the pressure on the rise in the metical has been reversed since the beginning of the year, with the US dollar now at 60 meticais, a change from the 63 that it has already been at, after having closed 2017 at 59 and 2016 71.2 meticais to the dollar at the end of 2016,” the Standard Bank analysts write.

Standard Bank’s latest report on African financial markets, which Lusa has had access to, says “the central forecast is that the dollar will be at 60 meticais for the rest of the year”, and that significant economic growth will only happen “during the next wave of foreign direct investment in the oil and gas sector”.The latest International Monetary Fund (IMF) projections released during the Spring Meetings this week point to real growth of 3 percent this year, dropping to 2.5 percent in 2019 and accelerating to 9.9 percent in 2023, the year in which gas exports from the Rovuma Basin are expected to begin.IMF economists also estimate that Mozambique’s public debt will continue to rise until 2022, when it will account for 130.3 percent of GDP, and then decline to 112.5 percent the following year. The forecast for this year is 110.1 percent of GDP, rising to 116.6 percent in 2019 and 122.1 percent in 2020.

“We believe that Anadarko’s final investment decision expected next year has the potential to improve economic sentiment and accelerate GDP growth before the start of natural gas exports if there are policy actions to address the many budgetary vulnerabilities,” the bank’s analysts maintain.

“Advances in reforms make it easier to do business in Mozambique and can also have an impact on economic growth,” Standard Bank adds, noting that “in any case, it seems clear that the positive effect of investments in natural gas can only be effective if there is a clear strategy for improving the national business environment”.