IMF recommends tighter fiscal control for Mozambique

5 July 2013

The Mozambican government should continue implementing prudent fiscal policy as the mining industry will, in the short term, continue to have a limited impact on State revenues, the International Monetary Fund (IMF) recommended in a statement issued Wednesday in Washington.

In a report from the IMF executive commission on the latest consultation with the Mozambican authorities, the IMF said that the Mozambican economy remained robust, despite a fragile world economic climate due to the international financial crisis.

“Severe floods at the beginning of 2013 had a significant impact, destroying cops and infrastructure in the south of the country, but Gross Domestic Product is expected to grow by around 7 percent this year, following expansion of mining sector activities and recovery of agricultural production,” the assessment said.

Inflation will remain at below 6 percent, in the mid term, the balance of trade will remain heavily dependent on foreign investment in the mining industry and fiscal performance is in line with the targets set by the Government, the IMF executive commission said.

“To limit fiscal risks, it is necessary to intervene in current expenses by limiting salary expenditure, and it is also vital to modernise fiscal administration and strengthen management of public finances,” the document said. (macauhub)