The financial rating agency Fitch has raised Mozambique's rating from CCC to CCC+, easing the risk outlook on lending to the country, according to a statement issued today by a government source.

"Mozambique's financing constraints have eased substantially with the $456 million credit agreement with the International Monetary Fund (IMF)," the Fitch note reads.

Fitch expects the deal to give the 'green light' to other forms of "concessional financing from multilateral partners, including the World Bank, after years of restricted access to external sources of funding following the 2016 hidden debts scandal."

The agency expects gross domestic product (GDP) growth to "accelerate to 7.7% in 2024 and remain high through 2026."

"We expect the IMF program to serve as a policy anchor for gradual fiscal consolidation and institutional capacity building, providing additional support for debt reduction," the note added.

Despite the improved rating, Mozambique remains at the "substantial risk" level and has unresolved structural weaknesses, security risks - particularly in Cabo Delgado - and vulnerabilities to extreme weather events, it stresses.

The level of CCC, three levels above Financial Default, means that "default is a real possibility", according to the methodology of this rating agency owned by the same owners of Fitch Solutions (Sapo/Lusa)