Floods slow economy growth

Prime Minister, Pascoal Mocumbi told parliament on Friday that the devastating floods earlier this year had taken a “harsh toll” on the Mozambican economy. He said that the gross domestic product (GDP) grew by only 3.8 percent compared to the 6-8 percent that had been predicted before the floods. Before the floods Mozambique was averaging a growth rate of about 10 percent per year. The Mozambican currency would devalue by an estimated 18 percent against the US dollar by the end of the year, instead of the forecasted 10 percent, Mocumbi said. He added that inflation was likely to reach 12 percent instead of the targeted 10 percent. Agricultural production grew by 2.8 percent compared with 9 percent growth in 1999. Livestock production fell 4.3 percent compared with growth of 21.3 percent in 1999. Transport and communications were also harmed by the flooding, shrinking by 3.6 percent compared to a growth of 10.1 percent in 1999. In May, donors pledged US $450 million to assist Mozambique in its reconstruction bid, but the funds were not immediately disbursed.