The third edition of the MozambiqueEconomic Update comes at a time when the economy isbeginning to show some signs of recovery in 2017. But asextractives and other large industries drive the recentdevelopments, whilst small and medium enterprises lagbehind, Mozambique is increasingly showing the signs ofbeing "A two-speed economy". Reestablishingmacroeconomic stability through a more balanced mix offiscal and monetary policy is a priority for private sectorgrowth. Slowly easing inflation and lower credit levelssuggest that the monetary policy cycle could begin to loosenas the economy continues to adjust. However, making thistransition smoothly will require a sharper fiscal policyresponse to restore the health of Mozambique’s public finances.