The proposed Economic and Social Plan and State Budget (PESOE) for 2026, approved by the Government and set for parliamentary discussion, outlines a fiscal framework that compares to a total expenditure of 512.749 million meticals (€6.884 billion) budgeted for this year.
In 2024, a total expenditure of 509.265 million meticals (€6.837 billion) was executed, and 471.922 million meticals (€6.335 billion) was recorded in 2023.
For the upcoming year, operational expenses are set to reach a new high, increasing from the forecasted 351.253 million meticals (€4.715 billion) for 2025 to 370.270 million meticals (€4.971 billion), primarily comprising current expenditures such as salaries.
The budgeted expenditures for investments in 2026 will rise to a record 107.559 million meticals (€1.444 billion), up from the estimated 98.776 million meticals (€1.326 billion) this year. Meanwhile, state expenditures on financial operations are expected to decline from 62.720 million meticals (€842 million) in 2025 to 57.793 million meticals (€776 million).
State expenditure in Mozambique fell by 4% in the second quarter compared to the same period in 2024. However, the Ministry of Finance warns of pressure from rising salaries and public debt amid weak domestic revenue mobilization.
The PESOE proposal for 2026 suggests that state expenditure corresponds to 32.3% of the estimated GDP for the next year, while revenues of 421.959 million meticals (€5.667 billion) will account for 25.5% of GDP.
The most recent fiscal risk monitoring report, released this month, highlights that public spending has faced adverse dynamics recently, reflecting structural rigidity and budget pressures.
The report also indicates a 4% year-on-year reduction in state expenditure in the second quarter, amounting to 3.8 billion meticals (€50.8 million).
“The main pressures were observed in personnel expenses and public debt charges, accounting for 52% and 11% of total quarterly expenditure, respectively, a 12% increase in payroll and a 25% increase in public debt charges compared to the same period last year,” it states.
The report acknowledges that in the short term, pressure on state expenditure is expected to remain high, with limited capacity for domestic revenue mobilization and impacts from the relaxation of various support programs for the State Budget and development by international partners.
“This situation presents additional challenges to fiscal sustainability, requiring stricter public account management, budgetary priority setting, and enhanced fiscal discipline,” it reads.
