This debt sustainability analysis (DSA) updates the joint International Monetary Fund (IMF) and International Development Association (IDA) DSA from May 2012. Mozambique moves from low to moderate risk of debt distress as the result of: (i) a lower discount rate, (ii) a significant increase in debt contracted in the last two years related to an ambitious public investment program aimed at narrowing the infrastructure gap, and facilitating the development of natural resources, and (iii) large movements in the underlying balance of payments with the onset of coal exports and significant commercial investments in natural gas exploration and liquefaction. Staffs agree with the authorities on the importance of the public investment program for development. The increased risks to DS, however, should be contained by moderating public external borrowing compared to its current accelerated pace. The DSA highlights that further improvements in debt management and investment planning capacity are important for continued DS, notably in the case of commercial borrowing. As public debt is largely external, the evolution of total public debt indicators mirrors that of public external debt. Private external debt is expected to increase rapidly in importance, mainly driven by investment in the natural gas sector, and to comprise the majority of external debt by the end of this decade.
Details
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Document Date
2013/06/10
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Document Type
Board Report
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Report Number
79691
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2015/04/27
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Disclosure Status
Disclosed
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Doc Name
Mozambique - Joint bank-fund debt sustainability analysis : 2013 update
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Keywords
standard deviation;real gdp;real exchange rate appreciation;debt to export ratio;grace and maturity period;Public and Publicly Guaranteed;external current account deficit;real exchange rate depreciation;present value of debt;development of natural resources;improvements in debt management;public sector debt;discount rate;public sector loans;debt sustainability;natural gas exploration;external debt sustainability;risk of debt;nominal interest rate;public investment program;primary balance;gdp deflator;private external debt;real interest rate;foreign direct investment;exchange rate change;balance of payment;medium-term macroeconomic framework;public external debt;private external borrowing;private sector debt;public sector borrowing;natural resource sector;coal mining sector;total external debt;total public debt;increase in debt;debt sustainability analysis;public transport fare;consumer price inflation;sovereign wealth fund;nonfinancial public sector;labor force growth;impact of flood;import of goods;Effective interest rate;macroeconomic and fiscal;primary fiscal deficit;stock of debt;export growth rate;external debt ratios;exchange rate shock;baseline scenario;grant element;export value;
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Citation
Mozambique - Joint bank-fund debt sustainability analysis : 2013 update (English). Debt Sustainability Analysis (DSA) Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/406191468172128079/Mozambique-Joint-bank-fund-debt-sustainability-analysis-2013-update