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Mozambique's 2025 economic growth projected to recover to 3.0 percent - IMF
Mozambique's 2025 economic growth projected to recover to 3.0 percent - IMF
By: Nii Ammui Fio | 2 mins read
Mozambique’s economy is expected to rebound in 2025, with the International Monetary Fund (IMF) projecting a 3.0 percent growth rate.
This comes after economic activity contracted sharply in the last quarter of 2024 due to social unrest, leading to a significant decline in real GDP.
An IMF team, led by Mr. Pablo Lopez Murphy, engaged in discussions with Mozambican authorities from February 19 to March 4, 2025, as part of the Fifth and Sixth Reviews under the Extended Credit Facility (ECF)-supported program. The discussions focused on policies necessary to sustain economic recovery and strengthen fiscal discipline.
At the conclusion of the visit, Mr. Lopez Murphy highlighted key economic developments and policy recommendations in a statement:
“The IMF team has held constructive discussions with the Mozambican authorities on the fiscal, financial, and structural policies needed to support the completion of the Fifth and Sixth Reviews of the ECF arrangement.
“Economic activity contracted sharply in the last quarter of 2024, reflecting the impact of social unrest. Real GDP declined -4.9 percent (yoy) in 2024Q4 from growth of 3.7 percent (yoy) in 2024Q3. Overall growth in 2024 was 1.9 percent. For 2025, growth is projected to recover to 3.0 percent as social conditions normalize and economic activity picks up, especially in services.
“Preliminary estimates suggest that there were significant fiscal slippages in 2024 that are in part explained by the slowdown in economic activity during the last quarter. Fiscal consolidation in 2025 is necessary to secure fiscal and debt sustainability and preserve macroeconomic stability. Wage bill spending overruns continue crowding out important spending priorities including social transfers and infrastructure. Rationalizing wage bill spending and reducing tax exemptions should underpin fiscal consolidation, social spending should be prioritized, and debt management could be further strengthened to avoid arrears.
“Inflation pressures picked up but remain controlled. The Bank of Mozambique initiated a loosening cycle in January 2024, cutting the policy rate by 500bps so far (to 12.25 percent). The central bank also reduced reserve requirements on local currency deposits, from about 39 to 29 percent, in late January 2025. Despite supply-chain disruptions and higher food prices related to social unrest, inflation remained below the implicit target of 5 percent.”
During its mission, the IMF team engaged with key government officials, including President Daniel Chapo, Prime Minister Maria Levy, Minister of Finance Carla Loveira, and Governor of the Bank of Mozambique Rogério Zandamela.
The delegation also held discussions with civil society groups, political representatives, development partners, and private sector stakeholders.
Expressing appreciation for the collaboration with Mozambique’s leadership, Mr. Lopez Murphy affirmed that further discussions regarding the program reviews would continue in the coming weeks.
The IMF remains committed to supporting Mozambique’s economic recovery and long-term financial stability.
