The national business robustness index registered a slight increase during the past year, from 39 to 40%, influenced by the continuing process of gradual recovery of economic activity, associated with the reopening of economies and the relaxation of restrictions imposed as part of the fight against Covid-19.
The slight rise suggests that, although challenges remain, businesses have shown a trend of gradual recovery, reflected in the improvement in business sector turnover of about 23 percent in the fourth quarter, compared to the previous one, culminating in improved performance ratios.
The figures were presented yesterday in Maputo by the president of the Confederation of Mozambican Economic Associations of Mozambique (CTA), Agostinho Vuma, during the “economic briefing” on business performance and economic prospects for 2021, in which the outbreak of the Covid-19 pandemic was the dominant variable.
This slight improvement in business performance was largely explained
by the recovery in the hotel and restaurant, trade and services, and transport sectors which, due to the easing of restrictions, saw the reopening of a large part of the establishments that had been closed.
On the other hand, the recovery in aggregate demand associated with the seasonal effect of the festive season is noteworthy.
Regarding the business environment, in what concerns the “market regulation” component, the CTA president said that the third quarter of the year was marked by the continuity of the easing of restrictions, approval of the law for credit institutions and financial companies, and the introduction of electronic sealing for goods in transit.
According to Vuma, as for economic stimulus policies, the fourth quarter of 2020
was marked by the extension of the Value Added Tax (VAT) exemption on sugar, oils and soaps until 2023 and the extension of the deadline for the application of excise tax rates until 2022.
According to the source, these policies represent a positive stimulus for these
sectors and can contribute to the strengthening of the business recovery.
Regarding the macroeconomic environment index, in the fourth quarter of 2020, CTA noted a slight deterioration of this indicator compared to the previous quarter, having reduced by 0.7 percentage points, from 48.0% to 47.3%.
This slight deterioration is due mainly to the depreciation of the Metical against the currencies reference currencies traded on the market, mainly the US dollar, which depreciated from 71.20 MZN/USD to 73.70 MZN/USD.
It is also due to the acceleration, albeit timid, of inflation from 2.92% to 3.12%, without
neglecting the retraction of the economy’s growth by 2.37% in the 4th quarter compared to the same period in 2019.
Meanwhile, he did not fail to note the reduction in interest rates in the IV quarter of 2020 which, although not large enough to boost the improvement in the macroeconomic environment, made a major contribution to ensuring that the deterioration was not more pronounced.
