Mozambican public debt to reach 102,5% of GDP this year

Rogério Zandamela, governor of the bank of Mozambique

Rating agency Fitch expects Mozambique's public debt to reach 102,5% of GDP this year. The economy is expected to grow by 3.5% this year and by 3.7% in 2019

'The government debt, including guarantees, will rise to 102,5% this year and its trajectory is highly sensitive to exchange rate volatility', write the analysts of rating agency Fitch.

In an analysis of the country's economy sent to investors, to which Lusa had access, experts say that 'the budget deficit will reach 5.7% of GDP, rising to 6.9%, considering arrears, and then gradually increase to 7.3% in 2019 and 7.8% in 2020, reflecting the still low growth and pressure on spending due to this and next year's electoral cycle and to decentralization in 2020.'

Fitch forecasts indicate that 'public debt will increase, reaching its peak at 2022, when the debt-to-GDP ratio will reach 119% due to slower economic growth expectations and limited budget consolidation.'

The biggest risks, they conclude, consists of 'faster-than-expected exchange rate depreciation, higher deficits and delays in gas mega projects.'