While the Mozambique budget was debated in Parliament on April 24 and approved in May, a more complete picture on the budget was made publicly available more recently, according to Samantha Singh of Standard Bank Research.
The budget, she said, which is guided by the Economic and Social Plan (PES), suggests a gross domestic product (GDP) growth rate of 7.5% and inflation target of 5.1% year-on-year (y/y) for 2015. Government also expects foreign exchange (FX) reserves to end the year around USD2.5bn.
Total revenue is estimated at MZN160.7bn (27.0% of GDP) compared to planned expenditure of MZN226.4bn, leaving a deficit excluding grants of MZN65.7bn (cUSD1.87bn) or 11.1% of GDP, from 10.5% of GDP realised in 2014. The receipt of MZN20.4bn (cUSD553m) in grants will reduce the deficit to 7.6% of GDP from 6.6% in in 2014.
Current expenditure is set to reach MZN120.4bn or 20% of GDP (up a modest 3% y/y), while capital expenditure is set to reach MZN83.2bn or 14% of GDP (10% more than the realised investment in 2014). Subsidies make up 0.5% of GDP with subsidies for fuel and wheat representing a large chunk.
“It is likely that there would be a supplementary government budget in Q3:15,” Singh added. “In the recent past these budgets would depict an increase in both anticipated revenue collections and expenditure.
"In 2014, the actual budget outcome then saw revenue targets surpassed slightly while revealed poor execution on capital expenditure with only 72.4% of the budgeted amount realised.”
Source: Standard Bank
More details of Moz 2015 budget.
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