“The growth will be limited due to fiscal consolidation efforts, which a new International Monetary Fund (IMF) program is likely to reinforce, while scheduled maintenance in the Coral Sul floating liquefied natural gas project will also result in a temporary decline in natural gas and condensate production. Therefore, it is likely we will reduce our real GDP growth forecast for 2026 from 3.8% to 2.5%,” analysts state.
In an analysis sent to clients, the African department of this British consultancy also lowered the growth forecast for this year from 1.8% to 1.4%, following a 1.9% decline in economic activity during the first three quarters of this year, compared to the same period last year.
“The economic prospects for next year are slightly more favorable, thanks to improved political stability and sentiment, which will aid in the continuous recovery of the services sector, while increased investment and construction growth related to LNG project development will also drive growth,” the analysts note.
They conclude that this quarter’s figures are expected to worsen due to cyclical effects: “There is a seasonal agricultural effect in the fourth quarter, as it is the scarcity period before the harvest, which typically results in a quarterly decline. However, we expect the economy to record a significant annual growth jump in the fourth quarter of 2025 due to the base effects of post-electoral disruptions in the fourth quarter of 2024.”
Economic activity in Mozambique fell by 0.85% in the third quarter on a year-on-year basis, marking a year of consecutive declines, according to central bank data.
“The decline in economic activity in the third quarter of 2025, as measured by the annual variation in Gross Domestic Product (GDP), continues to reflect the effects of post-electoral tension, with significant impact on the secondary and tertiary sectors; from the expenditure perspective, GDP contraction is primarily due to reduced investment and private consumption,” a note from the Bank of Mozambique stated, citing data from the National Institute of Statistics.
The Mozambican economy had already contracted by 5.68% in the fourth quarter of 2024, a period marked by strong opposition to the general elections of October 9 that year, followed by further declines of 3.92% and 0.94% in the first and second quarters of this year, respectively.
The Mozambican government acknowledges a “substantially more adverse” financial scenario compared to the forecast in the proposed Economic and Social Plan and State Budget (PESOE) for 2026, cutting growth predictions to 1.6% this year, as well as expected revenues in 2026.
“A recovery in economic growth is projected to 2.8% in 2026, compared to the 1.6% forecast for 2025, primarily driven by the expansion of the services sector, growth in Liquefied Natural Gas (LNG) exports, as well as the dynamism of the agricultural sector and significant investments in the energy sector,” according to the government’s budget proposal for 2026.
In the PESOE law for 2025 – approved only in May, due to the general elections of October 2024 – the government projected economic growth of 2.9% this year (1.9% in 2024).
