Standard Bank's economic forecast for Angola & Mozambique

The recent protests and disruptions in Mozambique have raised concerns about the country's economic stability. Fáusio Mussá, Chief Economist at Standard Bank Mozambique, provided insights into the current situation and its impact on the nation's growth prospects. The ongoing three-day protests have caused disruptions at the border and led to a slowdown in economic growth projections for the last quarter of 2024. With uncertainty looming over the final election results and potential delays in natural gas investments, Mozambique is likely to face softer growth next year as well. The inflation rate in Mozambique, however, remains relatively low compared to other African countries. Despite temporary food price pressures and supply chain disruptions due to border issues, the central bank is expected to maintain its monetary policy stance. While a rate cut is anticipated at the November meeting, the projection for additional cuts in 2025 has been revised due to increased prudence from the central bank. Shifting focus to Angola, the country's oil economy is showing signs of stabilization with a projected growth in oil output for the year. The recent discussions with the IMF for a funded program indicate positive developments for Angola's funding and structural reform prospects. The country's significance as a route for mineral extraction and its strategic importance to the West, particularly the United States, highlight the continued interest in Angola. In terms of inflation, Angola faces challenges with high inflation rates still exceeding the central bank's target range. While there is a projected deceleration in inflation rates, concerns remain over fuel subsidy reforms and foreign exchange backlog exerting pressure on prices in the coming year. Overall, both Mozambique and Angola are navigating through economic challenges that require strategic planning and structural reforms to ensure sustainable growth and stability in the long run.