Mozambique: First Review under the Three-Year Arrangement under the Extended Credit Facility, and Request for Modification of the Monetary Policy Consultation Clause, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Mozambique
IMF Staff Country Reports, December 2, 2022
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- Mozambique: First Review under the Three-Year Arrangement under the Extended Credit Facility, and Request for Modification of the Monetary Policy Consultation Clause, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Mozambique
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Bibliographic details
- Published: December 2, 2022
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400225659.002
Key findings
- The economic recovery is strengthening driven by a successful vaccination campaign and recovery from COVID-related restrictions.
- Growth is projected at 3.8 percent this year, rising to 5 percent in 2023 as the first liquefied natural gas (LNG) project enters production.
- Food and fuel prices have pushed inflation to double digits.
- Monetary policy has been proactive, including a further 200bps increase in the policy rate in September 2022.
- Credit conditions remain tight.
- Financial sector buffers built before the pandemic have underpinned banking sector resilience.
- Fiscal outcomes have been in line with expectations.
- The current account deficit is lower than forecast, though it still widens due to LNG infrastructure imports, as exports have been stronger than anticipated.
- International reserves have declined faster than anticipated due to higher imported fuel prices.
Macroeconomic projections and drivers
- Growth: 3.8 percent (current year); 5 percent (2023) with LNG production start.
- Inflation: at double digits driven by food and fuel price increases.
- External: current account deficit narrower than forecast but widened by LNG infrastructure imports; exports stronger than anticipated.
- Reserves: international reserves have declined faster than anticipated because of higher imported fuel prices.
Monetary and financial sector developments
- Monetary policy: proactive stance with a further 200bps policy rate increase in September 2022.
- Credit: conditions remain tight.
- Banks: resilience supported by financial sector buffers accumulated before the pandemic.
Fiscal and public debt considerations
- Fiscal outcomes: reported to be in line with expectations.
- Public debt and external debt are listed subjects of the report (no additional numeric details provided in the summary).
Policy implications and priorities (as reflected in the summary)
- Maintain monetary policy vigilance given double-digit inflation and imported price pressures.
- Preserve financial sector buffers to sustain banking sector resilience amid tight credit conditions and external pressures.
- Manage LNG-related external financing and imports to contain widening of the current account.
Metadata highlights
- Publication date: December 2, 2022
- Pages: 85
- Series: Country Report No. 2022/358
- ISBN: 9798400225659
- DOI: https://doi.org/10.5089/9798400225659.002
- Subjects: External debt, Fiscal policy, Fiscal stance, Inflation, International organization, Monetary policy, Prices, Public debt, Revenue administration
- Keywords: climate policy agenda, draft sovereign wealth fund law, East Africa, ECF arrangement, Fiscal stance, Global, Inflation, inflation expectation, ownership regime, Southern Africa, state guarantee, Sub-Saharan Africa
Source: Mozambique: First Review under the Three-Year Arrangement under the Extended Credit Facility, and Request for Modification of the Monetary Policy Consultation Clause, and Financing Assurances Review—Press Release; Staff Report; and Statement by the Executive Director for the Republic of Mozambique (IMF Staff Country Reports 2022, 358), December 2, 2022.
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