As had also already been advanced by the IMF in June this year, the consultancy Fitch Solutions said on Sunday (23-08) that Mozambique would be able to avoid a recession this year, and would in fact be the only country in southern Africa to grow at all.
“Fitch Solutions anticipates that Southern Africa will have the weakest economic performance in sub-Saharan Africa, both in 2020 and in 2021,” a note sent to customers, to which Lusa has had access, reads.
The consultancy, controlled by the owners of the Fitch Ratings agency, estimates 0.2% growth this year in Mozambique, the only country in the region which will be able to avoid contraction as a result of the Covid-19 pandemic and the fall in commodity prices, especially oil.
Analysts however note that the 0.2% growth anticipated this year is nonetheless “the lowest in the past three decades”, and argue that the 3.3% drop in the second quarter of this year should be offset by activity in the second semester, with the lifting of lockdown measures.
“Our central forecast is that the end of total confinement, together with robust investment in the wake of the 2019 cyclones and the development of the liquefied natural gas sector, will be sufficient to maintain growth in positive territory in 2020.”
“In 2021, economic growth should accelerate to 3.6%, and the return of people to the markets should guarantee more profits and investments in the services and commerce sectors,” the analysis concludes.
Also read: Fitch forecasts 10.25% interest rate in Mozambique throughout 2021
Angola to contract 4%
On the other hand, Angola, like South Africa, the most industrialised economy in the region, is seen as remaining in negative territory this year.
“We anticipate that growth in Angola, southern Africa’s third-largest economy in terms of nominal GDP, will be disappointing, with the country expected to go through the fifth consecutive year of recession,” the analysts say, stressing that “the oil sector will continue to be primarily responsible for economic activity, and low oil prices, the lack of major new investments in the sector and the achievement of the goals of the Organization of the Petroleum Exporting Countries (OPEC) will imply declines in production, both in 2020 and in 2021″.
Fitch Solutions therefore estimates an economic contraction of 4% this year and a slight recovery of 0.8% next year for this fellow Portuguese-speaking country.
Source: Lusa via Club of Mozambique