Economics, Econometrics and Finance
4 years ago

Public debt service in Mozambique depresses economy, raises prices, weakens currency.

RePEc: Research Papers in Economics
The Macroeconomic Effects of Public Debt: An Empirical Analysis of Mozambique
António Afonso, Yasfir Ibraimo

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Public debt in Mozambique has been increasing, leading to concerns about its impact on the economy. A study analyzed the effects of public debt from 2000 to 2016. They found that debt service (repaying debt) had a more negative impact on the economy than the debt itself. Debt did not significantly affect real output, but debt service led to lower output, higher prices, and currency depreciation.