Mozambique’s business confidence deteriorates

The Mozambican Economic Climate Indicator (ICE), a measure of business confidence, wane in the second quarter ending June registering  85.7 points, one point less than in May, Mozambique’s National Statistics Institute (INE) has announced.

ECI, an expression of the confidence of entrepreneurs in the real sector, registered a fall in the second quarter of 2021, which happens for the second consecutive quarter, with the level of its balance remaining below the average of the respective time series. 

The continuously unfavourable environment was influenced by the low demand perspective, which surpassed the employment perspective, which increased slightly in the reference period.

The ICE thus registered a fall “for the second consecutive quarter”, with a balance that remains “below the average”, and which currently stands at 98.4 points of all ICE figures since 2004.

“The continuously unfavourable situation was influenced by the low prospect of demand, which supplanted the slight increase in the employment outlook,” the INE said.

Economic fluctuations continue to be linked to the evolution of the Covid-19 pandemic and restrictions associated with respective prevention measures.

The ICE is part of the bulletin of Economic Confidence and Climate indicators, a monthly publication on the situation in Mozambique compiled based on a questionnaire sent to companies in the non-financial sector.

“The study expresses the opinion of economic agents about the evolution and perspective of their activity, particularly on employment, demand, orders, prices, production, sales and activity limitations,” the Mozambican statistical authority said.

During the first half of 2021 Mozambican GDP grew by 1.05%.

The  2021 State Budget  forecasts economic growth of 2.1% but twin problems of  Covid-19 and  conflict in northern Mozambique continues to scupper sustainable development and growth.

The French energy giant declared force majeure on the $20 billion project in April following security threats posed by terrorists in northern Mozambique.

There is now hope for the project restart after troops from Rwanda and member states from the Southern African Development Community have since deployed to support Mozambican forces to help suppress the insurgency.

INE is the governing body of the National Statistical System (SEN). Its mission is to respond, in a timely manner, to the users’ statistical information needs and to promote the national statistical culture thus contributing to assert itself as the main statistical reference for national development.

INE which is part of the Ministry of Finance of Mozambique is also  in charge of collecting census data and undertakes regular surveys on different socio-economic related aspects.