IMF praises Mozambique's fiscal policies

Prudent fiscal and monetary policies during 2007 have kept inflation under control in Mozambique, the International Monetary Fund said in a statement on Monday.

“We congratulate the Mozambican authorities on their strong commitment to sound economic policies and for an impressive economic track record over the last years.

“Prudent fiscal and monetary policies during 2007 have kept inflation under control, albeit somewhat higher than programmed, due to high food and international oil prices,” said the IMF.

The fund said that the extensive structural reforms in public financial management, with the implementation of a public financial administration system and efforts to improve the business environment, are key elements of an ambitious economic recovery programme.

During the same period, the country’s GDP growth averaged 8%.

“We acknowledge that the country still faces major challenges. Despite the authorities’ efforts, poverty levels are still high, and there is a need to develop policies towards employment generation and improvement of income distribution within the different regions of the country,” said the IMF.

The fund said it is encouraging the country to work towards reducing the cost of doing business and supporting the development of small and medium enterprises in the economy, as well as the diversification of the structure of the productive sector.

“Extending financial services and access to rural areas, and removing infrastructure bottlenecks, including by ensuring energy security, would be other important steps towards supporting high growth and significantly reducing poverty,” it said.—Sapa