Mozambique faces "vulnerable stagnation" with severe economic erosion over the past decade, marked by unsustainably high public debt, a weak external balance, and real GDP growth outside extractives hovering around 2%, barely matching population growth. The overvalued metical has appreciated over 20% in real terms since 2021, crippling export competitiveness and causing pervasive foreign exchange shortages, while fiscal deficits of 4%-6% of GDP are financed by domestic banks nearing capacity. With roughly two-thirds of the population now in poverty and 500,000 new job seekers annually, the government's reliance on administrative controls and status-quo bias—driven by political reliance on public sector wages and fear of urban inflation—is deepening distortions. Three paths exist: muddling through until potential 2030s gas revenues; a politically difficult "growth-first" adjustment involving phased depreciation and spending reforms; or a forced, disorderly correction if delays continue. The window for a managed transition is narrowing rapidly.