Mozambique’s private sector PMI falls to 46.4 in Dec ’24

Mozambique’s private sector faced a sharper downturn in December 2024, with the Purchasing Managers’ Index (PMI) plunging to 46.4 from 48.4 in November.

This marks the lowest reading since August 2020, signalling a significant contraction in business conditions as protests and strikes following the general election weighed heavily on the economy.

Customer demand fell at its fastest rate in over four years, dragging down output, new orders, and purchasing activity across all monitored sectors.

Businesses reported widespread disruptions, including border closures causing product shortages and capacity challenges. Employment and inventories also declined, with firms struggling to recruit workers during the unrest.

Despite the turmoil, input costs dropped for a second consecutive month, allowing firms to reduce selling prices slightly. However, the outlook remains bleak, with sentiment among businesses near a four-year low.

Forecast

Standard Bank has revised Mozambique’s GDP growth forecast for 2024 to 2.5 per cent from 5.4 per cent in 2023, citing post-election tensions, supply chain disruptions, and Tropical Cyclone Chido’s impact. Projections for 2025 GDP growth have also been lowered to 3 per cent, with inflation risks heightened by fiscal pressures and rising food costs.

Attribution: Amwal Al Ghad English

Subediting: Y.Yasser