Mozambique: Economic growth may slow in 2008, IMF says

3 November 2008

Washington, United States, 3 Nov – A mission from the International Monetary Fund (IMF) to Mozambique has said that the country has already been affected by the rise in fuel and fuel prices and that that would lead to lower levels of economic growth in 2008.

On a visit to Mozambique between 14 and 30 October, the IMF mission noted that the economy remained strong and basic inflation, which excludes food and energy, was below 3 percent, according to a statement published Thursday.

However, when food an energy are included, the rates soars to over 10 percent and thus economic growth would be 6.5 percent, or less than the 7 percent growth posted in 2007, it said.

the IMF mission, which travelled to Mozambique to assess the progress of the Policy Support Instrument (PSI) and to discuss the country’s economic reforms, concluded that all the programme’s targets had been reached and that significant progress had been made in management of public finances and improving operating capacity of the tax system.

However, the mission warned that the country was not immune to the financial problems currently affecting the world economy and that Mozambique faced problems as a result of a fall in price of raw materials and the consequent fall in export revenues.

Also according to the IMF mission, the “international financial crisis could affect the influx of capital as well as the fact that the Mozambican economy is still very dependent on contributions from the international community.” (macauhub)