Determinants of Economic Growth in Mozambique
Keywords:
GDP growth, inflation, interest rates and exchange rates.Abstract
The study analyzed the determinants of Gross Domestic Product (GDP) growth in Mozambique for the period 1998-2024. We used the econometric technique of ordinary least squares (OLS) methods to analyze the determinants of GDP in this country. In this method, the dependent variable is the GDP growth rate and the independent variables are interest rates, inflation, consumption, investment and exchange rates. Among the different results, they suggest that only the independent variables consumption and investment determine the GDP growth rate in Mozambique because they are statistically significant at 1% and 5%, respectively. In terms of magnitude, the results suggest that, on average, a 1% increase in the growth rate of consumption and investment will increase the GDP growth rate by 0.221 and 0.015 percentage points, keeping everything else constant. Similarly, the results suggest that the other independent variables (inflation, interest rates and exchange rates) have no effect on the GDP growth rate in Mozambique.
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