Key facts
- Commercial bank credit to Mozambique's private economy grew 2.7% year-on-year in March.
Mozambique's commercial banks saw credit to the private economy grow by a modest 2.7% year-on-year in March, reaching MZN 104.4 billion. Household and trade credit led the expansion, while other sectors remained subdued. Net credit to the government decreased.
The uneven growth in credit to the private sector highlights potential challenges for broader economic expansion in Mozambique, with key industries showing weak borrowing activity despite a decrease in government borrowing. Rising inflation also poses a risk to economic stability.
In March, Mozambique's commercial banks reported a modest year-on-year increase of 2.7% in credit extended to the private economy, reaching MZN 104.4 billion. This growth was primarily supported by households, whose credit rose by 6.5% year-on-year, and the trade sector, which saw a 2.9% increase. However, credit to other significant sectors including agriculture, manufacturing, construction, public works, and tourism remained soft. Concurrently, net credit to the government declined by 10.1% year-on-year, though sovereign exposure continues to represent a substantial portion of domestic bank balance sheets. The Bank of Mozambique maintained its MIMO rate at 9.25% in May, with the prime rate standing at 15.50%. Inflation accelerated to 4.41% in April, with the central bank citing potential spillovers from the Middle East conflict impacting fuel and food prices.