Boston, MA -- (SBWIRE) -- 09/11/2014 -- Core Views:

- A ceasefire agreement between Renamo and Frelimo bodes well for political stability in the lead-up to the October election. However, the agreement's long-term effectiveness will depend on its details - which were not available at the time of writing - and on the extent to which it is implemented once the elections have passed.

- The ceasefire agreement bodes well for long-term economic growth. We have not made any upward adjustments to our forecasts as we had always believed that the low-level conflict would have a very limited impact on the economy, but the downside risks to our forecasts have decreased markedly.

- Large deficits for the trade and services accounts will keep Mozambique's current account deeply in the red over the coming years. However, an increasingly diversified export basket and continued foreign direct investment inflows mean that we see little threat of a balance of payments crisis.

- The Mozambican metical will remain stable over the next two years thanks to rising reserves, low inflation and prudent domestic monetary policy. The risks are to the downside, however, and stem from the country's massive current account deficit.

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Major Forecast Changes:

- No forecast changes.

Key Risks To Outlook:

- Mozambique is vulnerable to adverse weather specifically too much or too little rain and this will continue to pose a risk to the agriculturally-based economy.

- The security situation poses a major threat to economic growth, the external accounts and government revenue as a significant deterioration would likely lead to reduced foreign investment inflows.

- A failure to address deficient infrastructure is the most pressing risk to our upbeat view on the Mozambican economy. Transport infrastructure in particular is currently inadequate to get Mozambique's natural riches to international markets. Failure to address this would negatively impact our expectation that exports will be a major driver of growth over the coming years.

The Mozambique Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in The Mozambique and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of The Mozambique's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses:

- Forecast the pace and stability of The Mozambique's economic and industry growth through end-2017.

- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.

- Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.

- Contextualise The Mozambique's country risks against regional peers using BMI's country comparative Risk Ratings system.

- Evaluate external threats to doing business in The Mozambique, including currency volatility, the commodity price boom and protectionist policies.

Economic Outlook:

How will the Mozambican economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for The Mozambique through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Mozambique Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.

- BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).

- Balance of Payments - trade and investment, current and capital account.

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