Mozambique Economic Update, February 2021 : Setting the Stage for Recovery
The global pandemic has taken a heavy toll on Mozambique’s economy. In 2020, the country experienced its first economic contraction in nearly three decades. COVID-19 (coronavirus) hit the economy as it was attempting to recover from the slowdown tr...
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| Format: | Report |
| Language: | English |
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Washington, DC: World Bank
2021
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| Online Access: | http://documents.worldbank.org/curated/en/931171614625070870/Mozambique-Economic-Update-Setting-the-Stage-for-Recovery http://hdl.handle.net/10986/35214 |
| Summary: | The global pandemic has taken a heavy
toll on Mozambique’s economy. In 2020, the country
experienced its first economic contraction in nearly three
decades. COVID-19 (coronavirus) hit the economy as it was
attempting to recover from the slowdown triggered by the
hidden debt crisis and the tropical cyclones in 2019. Real
gross domestic product (GDP) contracted by 1.3 percent in
2020, compared to a pre-Covid estimate of 4.3 percent, as
external demand declined, domestic lockdown measures
disrupted supply chains and depressed domestic demand, and
liquified natural gas (LNG) investments were delayed.
COVID-19 has caused a sudden income loss for enterprises and
households, worsening living conditions, especially for the
urban poor largely engaged in the informal sector. According
to the National Institute of Statistics, as of June 2020,
about 120,000 jobs were lost and 63,000 employment contracts
suspended, with women being the most affected. Around 3
percent of the firms affected were forced to cease their
activity. Services activities are the hardest hit. The
tourism and hospitality industries have particularly
suffered a steep decline in revenues. COVID-19 has
jeopardized years of hard-won development gains, with about
one million people estimated to have slipped into poverty in
2020 (as measured by the international poverty line of 1.90
US Dollars per day). While there is great uncertainty about
the path of the pandemic, the economy is expected to
gradually recover from 2021 as aggregate demand rebounds and
LNG investments and extractive production gain momentum.
Despite the expected recovery, the widespread deployment of
COVID-19 vaccines will be at the core of a resilient
recovery. This Economic Update explores the implications of
COVID-19 for the economy, businesses and households. It
makes recommendations for moving forward—in the short-term
relief phase, as well as over the medium and longer term in
order to 'build back better'. |
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