Mozambique: IMF welcomes government’s prudent policies

19 December 2007

Washington, USA, 19 Dec – The International Monetary Fund (IMF) Monday praised Mozambique for its “strong” and “prudent” macroeconomic and tax policies, but warned that “fiscal transparency” needed to be strengthened.

In a statement issued Monday in Washington, the deputy administrative director of the IMF, Takatoshi Kato said that the “strong macroeconomic performance of Mozambique,” was due to “the application of prudent monetary and tax policies within the context of a flexible exchange rate regime.”

Kato said that “the strategy of consolidation of macroeconomic stability” should result in “acceleration of a second wave of structural reforms that should help to sustain the rapid growth,” of the country.

Kato made the statement after the organization’s directive committee completed its first review of the Mozambican economy under the terms of the so-called Policy Support Instrument – PSI, approved in June of this year.

This program aims to help low income countries that may not require the IMF’s help, but which wish to cooperate with it to prepare and support their economic policy.

Kato said that “costs related to election will be strictly controlled in order to prevent fiscal overspend.”

According to Kato, as well as the bank of Mozambique’s “prudent” monetary policy also praised the fact that the Mozambican authorities had thrown themselves, “energetically into the second phase of the structural reform agenda.” (macauhub)