Standard Bank’s economic outlook for Mozambique

Standard Bank's economic outlook for Mozambique remains cautious as the country grapples with a challenging economic environment. In a recent interview with Celio Hamide, Head of Sales and Global Markets at Standard Bank, key insights were shared regarding the country's GDP growth, inflation risks, and recovery efforts post-unrest. Mozambique's GDP is expected to see a modest growth of 2% to 3% in 2025, driven mainly by the service and agriculture sectors. However, concerns linger over the government's mounting domestic debt and the impact of inflation on basic food items due to supply disruptions. Inflation is projected to reach around 6.1% to 6.5% year on year in 2025, reflecting continued pressure on food prices. The aftermath of the unrest earlier is still being felt, with certain businesses struggling to reopen and food inflation remaining elevated. Despite these challenges, the central bank has implemented monetary policy easing measures to stimulate credit growth and lower bond yields. Further rate cuts are expected in the coming months to support economic recovery and stability. The government is also taking steps to ease domestic pressure and restore macroeconomic stability through budget proposals and remedial measures. Overall, Mozambique faces a complex road to economic recovery, but efforts are being made to navigate through these challenges and spur growth in the coming year.