Boston, MA -- (SBWIRE) -- 10/14/2013 -- Core Views

We maintain that the Mozambican economy will expand by 7.1% year-on-year (y-o-y) in 2013, slower than the 7.4% rate of 2012 due to the impact floods had on agricultural output in the first quarter. We expect economic growth will begin to accelerate again from 2014, peaking at 15.9% in 2020 when we believe that the country will see first production from gas reserves recently discovered off the northern coast.

Although significant challenges remain, there is some reason to believe that progress will be made in resolving the ongoing dispute between Mozambican ruling party Frelimo and the opposition Renamo. The leaders of both parties appear intransigent and this progress will therefore likely come in spite of rather than because of them.

We believe that the Mozambican monetary authorities will wait to see how quickly the economy recovers from a flood-induced growth slowdown in Q113 before deciding to enact further interest rate cuts, and we expect interest rates to remain at their current level of 9.00% for the remainder of 2013. That said, with inflation likely to remain relatively subdued thanks to a weak rand, the authorities have the scope to make further cuts if growth data in any way disappoints.

View Full Report Details and Table of Contents

Major Forecast Changes

We have made significant changes to our current account forecasts following the release of new and historically revised data from the authorities. We now see the shortfall reaching a massive 46.0% of GDP in 2013 thanks to a surge in the services account deficit. That said, we continue to believe that the external accounts will not pose a risk to macroeconomic stability because the demand for goods and services driving the shortfall is coming from projects that are foreign-run and financed.

Key Risks To Outlook

As the recent floods have shown, Mozambique is vulnerable to adverse weather. Over the years ahead the weather, specifically too much or too little rain, will continue to pose a risk to the agriculturally based economy.

About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff will help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.

Browse all Country Reports research reports at Fast Market Research

You may also be interested in these related reports:

- Estonia Business Forecast Report Q4 2013
- United States Business Forecast Report Q4 2013
- Bulgaria Business Forecast Report Q4 2013
- Slovakia Business Forecast Report Q4 2013
- Chile Business Forecast Report Q4 2013
- Philippines Business Forecast Report Q4 2013
- United Arab Emirates Business Forecast Report Q4 2013
- Hungary Business Forecast Report Q4 2013
- Iran Business Forecast Report Q4 2013
- Venezuela Business Forecast Report Q4 2013