The Executive Board of the International Monetary Fund (IMF) has concluded the first review under the three-year Extended Credit Facility (ECF) arrangement for Mozambique, the review of financing guarantees and approved the authorities' request for a change in conditionality.

"This allows the immediate disbursement of Special Drawing Rights (SDR) of 45.44 million (about 59.26 million dollars), usable for budget support, bringing Mozambique's total disbursements under the FCA agreement to SDR 113.6 million (about 150 million dollars)," reads the institution's statement of November 21 and consulted today by MZNews.

According to the document, the IMF predicts growth for Mozambique this year despite the worsening global economic environment and rising commodity prices.

"Inflation rose to double digits, driven by global fuel and food prices and tropical storms that affected domestic food supplies in the second quarter," continues the IMF.

The institution believes that fiscal developments, revenue collection and spending containment are in line with growth prospects, as well as investments in liquefied natural gas that "are boosting the current account".

According to the financial institution, the risks to this year's economic outlook are "significant" but "balanced".

"The pass-through of fuel and food inflation to other prices, social unrest, terrorist activity in the north, and natural disasters are downside risks, offset by upside risks stemming from the strengthening recovery, strong prospects for LNG demand, and scope for higher-than-expected medium-term growth [not counting LNG revenues]." Explains the IMF.

Quoted in the document, the Deputy Managing Director and Acting Chairman of the IMF Board, Bo Li, acknowledged the efforts to strengthen the country's economy. On the other hand, he pointed to tropical storms, reduced territorial security capacity, weak governance and debt vulnerability as challenges for leadership.

"In this context, continued capacity building and donor support remain imperative if Mozambique is to achieve its development goals," he said.