MAPUTO (Reuters) – Mozambique has lowered its forecast for economic growth this year to 2.2% from a previous forecast of 4% because of the impact of the COVID-19 pandemic, a state budget approved by lawmakers on Thursday showed.
The budget showed the southern African country, which was struck by two devastating cyclones last year, expects to record a deficit of more than 10% of gross domestic product in 2020.
The government expects to collect revenue of roughly 235 billion meticais ($3.5 billion) against expenditure of 345 billion meticais.
Heavily indebted Mozambique has been battling for years to recover from a debt crisis after admitting to $1.2 billion of previously undisclosed lending, much of which was supposed to be spent on a tuna fishing fleet.
The disclosure prompted the International Monetary Fund and foreign donors to cut off support, triggering a currency collapse.
($1 = 67.9000 meticais)
Reporting by Manuel Mucari; Writing by Alexander Winning; Editing by Chris Reese and David Holmes