Agencia de Informacao de Mocambique (Maputo)
13 May 2009
Maputo — The International Monetary Fund (IMF) predicts that the Mozambican economy will continue to grow in 2009, but at a slower pace than in recent years.
An IMF mission, which concluded a two week visit to Mozambique on Wednesday, predicts that growth this year will be 4.3 per cent, which compares with a 6.8 per cent growth rate in 2008. This economic growth rate is still about double the population growth rate.
The IMF team was in Mozambique for regular consultations with the government and for the fourth assessment of the Policy Support Instrument (PSI). A PSI is a means for the IMF to support low income countries, such as Mozambique, that no longer wish to borrow money from the Fund. The IMF claims that a PSI "helps countries design effective economic programs that, once approved by the IMF's Executive Board, signal to donors, multilateral development banks, and markets the Fund's endorsement of a member's policies".
According to an IMF press statement received by AIM, the head of the IMF mission, Robert Sharer warned that the international financial crisis "poses a serious challenge to all of sub-Saharan Africa". For sub-Saharan Africa as a whole, he expected growth to shrink from five per cent in 2008 to two per cent in 2009, with "a gradual recovery from 2010, contingent on a series of economic measures to stabilize financial systems and stimulate demand".
He expected Mozambique to do much better that the average, although "its strong economic growth will be somewhat affected".
The value of Mozambican exports would decline because of lower demand for raw materials, and hence lower prices. Sharer expected direct foreign investment to decline as investors postponed ambitious projects. Foreign credit for the private sector would also decline due to more restrictive loan conditions.
"As a result, the mission estimates that economic growth might fall from 6.8 per cent last year to 4.3 per cent in 2009, with a gradual recovery only at the start of 2009", said Sharer.
The mission believed that, given the low level of Mozambican public debt, "there will be some room to, at least in part, counterbalance the impact of the economic crisis on he country through rather more expansionist fiscal and monetary policies".
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