Mozambique

• Economic activity is gradually recovering from an abrupt contraction during the last quarter of 2024, and inflation pressures are muted.
• Growth is expected to remain moderate, as challenges including a constrained funding environment, policy uncertainty, and foreign exchange shortages are holding back faster growth. At the same time, government financing challenges have become acute.
• Decisive and coordinated policy action is critical to restore macroeconomic stability and tackle external imbalances. Such action is also needed to improve growth prospects, facilitate job creation, and reduce poverty.

An International Monetary Fund (IMF) team, led by Pablo Lopez-Murphy, IMF mission chief for Mozambique, visited Maputo from November 12–21 to hold discussions for the 2025 Article IV Consultation with Mozambique. The team met with Finance Minister Carla Loveira and Governor Rogério Zandamela of the Bank of Mozambique. The team also met with other senior government and central bank officials, members of the Parliamentary Budget Commission, the private sector, civil society organizations, and development partners.

At the conclusion of the mission, Mr. Lopez-Murphy issued the following statement:

“Mozambique is navigating a complex macroeconomic environment. While inflation remains contained and economic activity is gradually recovering from the social unrest following the October 2024 elections, growth remains subdued.

“The outlook is marked by significant uncertainty. On the positive side, the recent announcement by TotalEnergies to resume its major LNG project offers a potential boost to medium-term growth. Mozambique's exit from the Financial Action Task Force (FATF) grey list further reflects progress in strengthening its anti-money laundering and counter-terrorism financing frameworks. These developments could help catalyze investment and support external financing.

“However, significant challenges remain. Elevated fiscal and debt vulnerabilities, including government arrears, continue to weigh on the country's near-term growth prospects. FX pressures add to the challenges. Without decisive policy action, vulnerabilities could deepen, undermining macroeconomic stability and the wellbeing of the population.

“Discussions focused on policies to restore macroeconomic stability and anchor debt sustainability. A coordinated policy package that includes urgent fiscal consolidation while protecting the vulnerable and poor, greater exchange rate flexibility, and structural reforms to improve governance and foster private sector-led growth would help Mozambique address its challenges.

“The team wishes to thank the Mozambican authorities, civil society, and development partners for their frank and constructive engagement and support during the mission.”