An immediate fiscal consolidation is required to restore budgetary sustainability, reduce financing needs, and place debt on a clear downward trajectory to alleviate debt vulnerabilities while creating fiscal space to support development and protect the most vulnerable, according to the IMF press release.
Following the team’s visit from August 21 to 29 in Maputo, the release emphasizes that given external and budgetary imbalances, the IMF team recommended decisive measures by authorities to restore macroeconomic stability, improve growth prospects, facilitate job creation, and reduce poverty.
In today’s release in Maputo, the IMF team indicates that discussions with the government covered macroeconomic challenges, balance of payments prospects, and forecast financing needs. It notes that these discussions were fruitful and will continue in the coming months.
The IMF projects Mozambique’s growth at 2.5%, primarily driven by a recovery in the service sector in the second half, following a sharp slowdown from October 2024 to March 2025 due to violence that ensued after the presidential elections.
The Fund also identifies emerging signs of increased foreign investor interest across various sectors, concluding that addressing macroeconomic imbalances is essential to unlocking the full potential of foreign direct investment and maintaining investor confidence.
