Mozambique’s economy is slowly recovering from last year’s sharp downturn, but mounting fiscal pressures and foreign exchange shortages threaten to derail the rebound, an IMF mission warned Thursday.
After talks with authorities in Maputo from November 12–21, mission chief Pablo Lopez-Murphy said the country was “navigating a complex macroeconomic environment,” with growth still subdued despite easing inflation. “While inflation remains contained and economic activity is gradually recovering from the social unrest following the October 2024 elections, growth remains subdued,” he said.
The IMF highlighted a mixed outlook. Officials pointed to the planned resumption of TotalEnergies’ large LNG project and Mozambique’s removal from the FATF grey list as developments that could bolster investor confidence and unlock external financing. “These developments could help catalyze investment and support external financing,” Lopez-Murphy noted.
But the Fund warned that the government faces acute financing challenges, rising arrears, debt vulnerabilities and persistent pressure on the metical.
“Without decisive policy action, vulnerabilities could deepen, undermining macroeconomic stability and the wellbeing of the population,” the IMF said.
Talks focused on restoring stability and keeping debt sustainable. The Fund urged Maputo to adopt a coordinated policy package combining urgent fiscal consolidation while protecting the poorest greater exchange rate flexibility, and reforms aimed at improving governance and encouraging private sector growth.
The mission chief thanked Mozambican authorities, civil society and development partners for what he described as “frank and constructive engagement” during the visit.
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