Country Report Mozambique June 2011

Outlook for 2011-12: Economic growth

According to the latest IMF estimate, real GDP grew by 6.5% in 2010, down on the 8.5% previously estimated. Growth is expected to remain brisk in 2011 on the back of increasing inflows of FDI into minerals and infrastructure mega-projects, as well as ongoing donor contributions. Agriculture will benefit from growth in the output of food and cash crops, as well as from the implementation of the government's national food production plan. Output from industry is expected to rise briskly on the back of strong inflows of foreign investment into the minerals sector, particularly to develop coal reserves. However, industrial production will remain below potential owing to the fitful power supply. The services sector is also expected to continue the strong performance registered in 2010. In particular, the hotel and restaurant sector and financial services are expected to attract increasing amounts of foreign investment. Growth is expected to accelerate to 7.3% in 2011 and 7.5% in 2012, largely on the back of increased coal production.

© 2011 The Economist lntelligence Unit Ltd. All rights reserved
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