Mozambique: IMF calls for urgent action
The local currency, the metical, has depreciated by 28% since the beginning of the year
JOHANNESBURG:
The International Monetary Fund has called for urgent action to stem Mozambique’s deteriorating economic performance, after revelations of $1.4 billion in hidden debt saw donor nations suspending aid to the country. In a statement, the IMF recommended “an urgent and decisive package of policy measures to avoid a further deterioration in economic performance”. Mozambique’s growth is forecast to drop to 4.5% this year-down from 6.6% last year-while rising inflation reached 16 percent in May. The local currency, the metical, has depreciated by 28% since the beginning of the year. “In addition, the discovery in April of $1.4 billion of previously undisclosed loans has pushed the total stock of debt at end-2015 to 86% of GDP,” IMF assistant director Michael Lazare said. “According to our technical assessment, public debt is now likely to have reached a high risk of distress.”
Published in The Express Tribune, June 26th, 2016.
The International Monetary Fund has called for urgent action to stem Mozambique’s deteriorating economic performance, after revelations of $1.4 billion in hidden debt saw donor nations suspending aid to the country. In a statement, the IMF recommended “an urgent and decisive package of policy measures to avoid a further deterioration in economic performance”. Mozambique’s growth is forecast to drop to 4.5% this year-down from 6.6% last year-while rising inflation reached 16 percent in May. The local currency, the metical, has depreciated by 28% since the beginning of the year. “In addition, the discovery in April of $1.4 billion of previously undisclosed loans has pushed the total stock of debt at end-2015 to 86% of GDP,” IMF assistant director Michael Lazare said. “According to our technical assessment, public debt is now likely to have reached a high risk of distress.”
Published in The Express Tribune, June 26th, 2016.