The IMF recognizes the impact of the "high costs" of fuel imports on Mozambique's international reserves, given the supply of foreign currency to the main fuel importers.

"At the same time, imports not related to mega-projects have increased significantly in the last two years, further decreasing the import coverage of reserves," the document points out.

Last January, the Bank of Mozambique increased the ratio of mandatory reserves to foreign demand deposits from 11.5% to 28%, and in April it reduced the supply of fuel to importers from 100% to 60%, the IMF recalls in the report released today.

The IMF announced the approval of this revision to the ECF on July 6, guaranteeing a disbursement of 60.6 million dollars to Mozambique, which was confirmed today in the institution's report.

In the note that accompanied the announcement of the second revision of the program approved in May 2022, and which brings the total amount already received by Mozambique to 212.09 million dollars, out of a total of 456 million dollars, the IMF says that it allowed two criteria to be overlooked: the primary budget balance at the end of last year and the accumulation of external debts by the public sector.

In its macroeconomic forecasts for this year, the IMF predicts an acceleration in the growth of Mozambique's Gross Domestic Product (GDP), from 4.2% in 2022 to 7% this year, anticipating that by the end of the year inflation will have fallen from 10.3% to 6.7%, the same as in 2021, but still almost double the previous two years.

The debt-to-GDP ratio is expected to continue its downward trend and reach 89.7% by the end of this year, an improvement on last year's 95.5% of GDP. (rtp)