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Statements on Mozambique Economic Outlook from Tiago Dionisio, Chief Economist at Eaglestone Advisory

Capital Markets in Africa, January 2, 2016

Mozambique: A Soft Landing in 2016 - Tiago Dionisio, Chief Economist

Mozambique's long-term economic outlook remains upbeat

Economic activity in Mozambique slowed in 2015. The latest data released by the National Statistics Bureau (INE) showed that real GDP expanded at a more modest 5.9% YoY in 2Q15. This is well below the growth rates seen in the previous four quarters, which averaged 7.4%. The mining and construction sectors remained the main growth drivers of the economy, improving 17.9% and 13.1%, respectively, from the same period of 2014. Although mining still accounts for a small share of the country's GDP structure (3.7%), it has been responsible for a significant part of the foreign direct investment (FDI) that has entered Mozambique in recent years. Large investments have initially been made in the coal sector, but more recently attentions have turned to the vast natural gas reserves in the Rovuma basin, in the north of the country. This has boosted other sectors such as construction, utilities, and real estate. All in all, Mozambique is currently a more diversified economy, but it remains highly dependent on the agriculture sector, which still accounts for nearly a third of its GDP.