Mozambique’s Economy Sees Biggest Contraction in Seven Years on Crisis

Daba Finance/Mozambique’s Economy Sees Biggest Contraction in Seven Years on Unrest

BREAKING NEWSFebruary 21, 2025 at 12:57 PM UTC

TLDR

Mozambique’s economy shrank 4.9% in Q4 2024, its steepest contraction in at least seven years
This follows a 3.7% GDP increase in Q3, according to the National Statistics Institute
The October 9 election unrest hit government revenue and deepened Mozambique’s debt crisis

Mozambique’s economy shrank 4.9% in Q4 2024, its steepest contraction in at least seven years, as post-election protests disrupted business activity. This follows a 3.7% GDP increase in Q3, according to the National Statistics Institute.

The downturn surpasses even the Covid-19 slump in 2020. The October 9 election unrest hit government revenue and deepened Mozambique’s debt crisis, prompting S&P Global Ratings to downgrade its local currency credit rating to CCC- on Wednesday.

Mozambique, once one of Africa’s fastest-growing economies, has struggled with a $2 billion debt scandal and an insurgency linked to Islamic State, delaying $50 billion in natural gas projects from TotalEnergies and ExxonMobil.

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Key Takeaways

Mozambique’s economic instability raises debt default risks, with S&P warning of a potential “selective default” (SD) if the government’s planned local debt swap auction is classified as distressed. Despite easing protests, sporadic demonstrations continue, highlighting Mozambique’s fragile business climate. The country’s economic recovery hinges on restoring investor confidence and reviving stalled gas projects, critical for long-term growth and debt sustainability.

Mozambique

Economy

GDP

Election

Economic Growth