Mozambique's economy to grow 6.5% next year: IMF

30 October 2015 - 14:20 By REUTERS

Mozambique's economy is expected to accelerate slightly to 6.5 percent next year due to a delay in investment in large natural resources projects, the International Monetary Fund (IMF) said. Growth in 2015 will reach 6.3 percent as China's slowing economy hits commodity exporters, the IMF's mission head to Mozambique, Michel Lazare said in a statement seen by Reuters on Friday.Economic growth in the southern African nation stood at 9.6 percent in 2014, the government has said.Gas discovered off the coast of Mozambique, one of the world's poorest countries, offers an opportunity to transform a country ravaged by a 16-year civil war that ended in 1992 but delays in initiating investments has set back economic growth."Inflation is expected to increase towards 5-6 percent over the next few months," Lazare said.The central bank said on Tuesday Mozambique's economy will grow by around 7 percent next year, a slowdown from a projected 7.5 percent in 2015. It also forecast inflation would increase above 5 percent next year, without giving a specific figure.Mozambique's inflation accelerated to 2.73 percent in September largely due to the impact of the depreciation of the Mozambican currency, the metical against the dollar.Lazare said that between 2017 to 2020 growth could average 8 percent owing to positive prospects of investments in extractive industries, especially liquefied natural gas.The IMF team completed its visit to Mozambique on Wednesday where it met with Prime Minister Carlos Agostinho do Rosario, economy and finance minister Adriano Maleiane, Bank of Mozambique Governor Ernesto Gove and other ministers.The global lender recommended a continuation of the tightening cycle after the monetary policy committee raised its benchmark lending rate by 25 basis points to 7.75 percent on Oct.14."The team believes that the authorities' economic program, together with the agreed policy package, is strong and adequate to respond to the temporary external shocks that the Mozambique economy is going through at the moment," Lazare said. ..

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