Government cuts economic growth forecast for 2016 from 7.8% to 7%.

IN THE MOZAMBICAN PARLIAMENT

Revision of economic growth for next year was announced

today,Wednesday,during the presentation of the proposal of the Economic and Social Plan and the State Budget for 2016.

The documents were presented by the Prime Minister,Carlos Agostinho do Rosario and the Minister of Economy and Finance,Adriano Maleiane respectively.

They dictated to review economic growth below expectations that the country is experiencing this year and the international economic environment,characterized by
the successive fall in prices of
the main products that the country exports,for example,coal.

Incidentally,in the first half of this year,the economy grew by only 6.3%,below the 7.5% growth forecast.

Despite the slowdown in growth,the Executive,unchanged,keeps inflation forecast at 5.6% for next year.

One argument is that,according to the Executive by October this year, average inflation remained controlled around 2.5%,below the 5.1%ceiling set for this year.

The Executive also provides that the foreign currency reserves of the Central Bank reach 2.7 billion, enough to cover 4.3 months of imports of goods and services.By October,the reserves covered 3.7 months of imports.

For 2016,the Executive is planning to mobilize 246,000 billion meticais(about5.12 billion US dollars at current exchange rates). for the State Budget,with 74.8% internal resources - which 176.4 billion will be revenues of the state - and 25.2% are foreign funds,
of which 40% are donations and 60% should be loans for investment projects.

Public expenditure of 246 billion meticais represents a reduction of 1.9 percentage points compared to the Gross Domestic Product (GDP),compared to this year (2015).

Of the amount,55.3% will be allocated to State operating expenses,34.1% to capital expenditure and the remaining 10.6% to financial transactions.