With economic growth of 0.1% in the first quarter of 2021, Mozambique effectively exited the recession This was supported by the key sectors in the primary economy, says Rand Merchant Bank (RMB).
Agriculture contributed 23.5% to total economic performance, countering the 18.1% decline in the mining sector and the contraction experienced in transport and communication, and hotels and restaurants.
“Our view that the economy will notch growth of 2.5% in 2021, is supported by the soft Q1 rebound,” says RMB Africa Economist Daniel Kavishe. “PMI numbers in Mozambique show that, in general, there was an improvement in new business orders in April. The figure improved to 51.3 from 49.1 in March.”
The bank also notes that most businesses surveyed by the National Institute of Statistics office, expect the economy to continue to recover over the next 12 months. The survey revealed that general demand in Mozambique remains lower compared to the end of last year, especially around accommodation, catering and similar services. However, the confidence indicators in the transport and storage services sector have fallen to their lowest levels over the past three quarters.
Kavishe says that, taking these surveys into consideration, it is clear that the recovery in Mozambique this year will not cut evenly across the economy: “Our estimates suggest that the primary industry will likely lead the charge in 2021 with the agricultural sector also expected to show significant gains. We further expect fiscal spending to support the construction sector. For now, we maintain our view for growth of 2.5% y/y in 2021.”
He also expects government’s recent decision to relax restrictions associated with tackling the pandemic, to boost economic recovery in the second half of the year.
“2021 is also a year of investment for FNB Mozambique. We believe it’s important to contribute to Mozambique’s growth sectors by reinforcing our competencies, updating our platforms and service quality provided as well as supporting our clients with holistic solutions to operate efficiently in country and internationally”, stated Janine Goosen, FNBM’s recently appointed Head of CCIB.
End
loading form...