economic conditions resulted in a 5 per cent decline in 1984. At the same time,current expenditures continued to increase by approximately l0 per cent bet'rreen 1983 and 1984. Expenditures on defence and security account for more than 35 per cent of total expenditures. fnvestment expenditure r,ras scheduled to declineby more than 35 per cent between 1983 and 1984, reflecting a decline in officialassistance, the inability to obtain credit, and a @vernment policy of restraint.Overall, the State budget remains in significant deficit. 208. The critical balance-of-payments situation reflects the continuing economicdeterioration in the country. As part of the colonial legacy, merchandise exports covered only a srnall portion of imports with the balance financed by services. The decline in exports to its Iowest level since 1978 reflects primarily thereduction in the production of agricultural export commodities. fmports alsodeclined in 1984, reflecting the acute shortage of foreign exchange (and credit) r Exchange rate: 1983: Mt 42.443. It should be noted,reported as trading up to 1r500$US 1.00 = Mt 40.1831 1984: $Us I.00 however, that the domestic currency has per US dollar on the black market.been If ...A/40/44L EngIi sh Page 71 with a resultant rnarginal improvement in the current account balance. Receipts from transit trade and norkersr remittances declined sharply after independence and have not recovered. AnticipaBed revenue from the export of electricity produced at the Cohora Bassa dam to South Africa has not materialized since the disruption of transmission lines by armed bandits has prevented the agreed level of power from being achieved. Foreign borrowing and assistance has not been sufficient to close the financing gap. As a result, t'lozambigue has experienced a nearly total loss of reserves. In addition, by the end of 1984, payments arrears totalled approximately $545 million. 209. By the end of 1984, the countryrs outstanding external debt totalled $2.4 billion (including arrears). Of this, 92 per cent represents bilateral public
**Analysis**
The text primarily discusses the economic situation of a country, highlighting the decline in exports, imports, and investment expenditure, as well as the significant deficit in the state budget and the country's external debt. The text also touches on the impact of the economic conditions on the country's balance-of-payments situation and the decline in foreign borrowing and assistance. Given the focus on economic indicators and the country's financial situation, I hypothesize that the text is most closely related to the categories related to economic development and international trade.

**Category**
Economic development, International trade