The Mozambican Government expects to collect 427.8 billion meticais, equivalent to approximately US$6.7 billion, in 2027, under a budget characterised by public spending restraint, moderate economic growth and the need to strengthen the sustainability of state finances. The projections are contained in the proposed Economic and Social Plan and State Budget (PESOE) for 2027, approved by the Council of Ministers on Tuesday, 13 October.
The document sets out a macroeconomic scenario based on real Gross Domestic Product (GDP) growth of 1.6% and average annual inflation of 7%, indicators that reflect expectations for the performance of the national economy over the coming year.
Projected revenue represents 23.5% of GDP and includes more than three billion meticais from liquefied natural gas (LNG) production, a sector expected to continue contributing to the financing of state activities.
Presenting the main elements of the proposal, Government spokesperson and Minister of State Administration and Public Service, Inocêncio Impissa, revealed that public expenditure is expected to reach 511.2 billion meticais, equivalent to 28.1% of GDP.
This figure represents a nominal reduction of approximately 1.8% compared with the amount provided for under the 2026 PESOE Law, signalling the Government's intention to curb budgetary expenditure and align the use of available resources with the country's economic conditions.
The fiscal consolidation strategy also provides for a budget deficit of 4.6% of GDP, while domestic borrowing is expected to be limited to 1.9% of GDP. Through these targets, the Government aims to control financing requirements and preserve the sustainability of public finances over the medium term.
According to Inocêncio Impissa, the proposal was designed to ensure the continued operation of essential state services without compromising objectives relating to expenditure restraint and stronger budgetary discipline.
The challenge lies in reconciling the financing needs of the various sectors of public administration with relatively limited scope for economic growth, in a context where prudent resource management is particularly important.
Regarding prices, the Government forecasts average annual inflation of 7%, a scenario that assumes a slowdown in the rate of price increases throughout 2027.
As for public investment, the PESOE allocates 79.6 billion meticais to the implementation of projects financed through domestic and external resources. This allocation is expected to support the achievement of priorities established by the various government sectors.
The Government maintains that budget implementation should focus on improving living conditions for the population, preserving macroeconomic stability and strengthening transparency in the management of public resources.
The proposal therefore places financial discipline at the heart of budgetary policy for 2027, seeking to balance the operational requirements of the state administration with investment and economic and social development objectives.
Following its consideration by the Council of Ministers, the document will be submitted to the Assembly of the Republic, which is responsible for examining and approving the economic priorities, revenue forecasts and budget allocations that will guide state activities during the next financial year.
Source: Mozambique News Agency (AIM)
