Mozambican government tells IMF it expects economic growth of 7.9 percent

11 July 2006

Washington, USA, 11 July – The Mozambican government expects the country to post economic growth of 7.9 percent this year and an inflation rate of 9.5 percent, according to a memorandum handed in to the International Monetary Fund (IMF) last April, but only now made public.

In the document, the Mozambican government said it expected growth of 7.9 percent “as a result of recovery in agricultural production and continued strong growth in construction related to mega-projects.”

“The impact of fuel price increases and the depreciation of exchange rates over the last few months is expected to raise inflation to 9.5 percent in 20006,” the document said.

The memorandum, which was requested by the poverty reduction and economic growth revision program, said that a new labor law project should be submitted to the country’s parliament “until the end of September 2006.”

“This law will increase flexibility in the labor market particularly by dealing with costs of firing and making contracting easier,” said the document, in which the Mozambican government also said it would continue to “restructure and encourage private participation in public companies, particualrly in infrastructure services.”

In its medium-term predictions the Mozambican government said it expected to fulfil millennium development objectives in terms of poverty reduction, infant and maternal mortality and access to drinking water.

The Mozambican government also told the IMF that in the medium-term its economic policy would be focused on “stimulating growth of the private sector involved in exports, whilst increasing debt sustainability.”

The Mozambican government also said that in the medium-term it would launch “a second wave of reforms,” including the “implementation of an agricultural and rural development strategy and for the reduction of the cost of doing business, including reform of the legal sector and strengthening of the financial system.” (macauhub)