A team from the International Monetary Fund (IMF), led by Mr. Pablo Lopez Murphy, held discussions from 21 to 29 August with the Mozambican authorities on the main economic and financial challenges and the policies needed to support macroeconomic stability while responding to urgent development needs and promoting growth inclusive in terms of jobs.

At the end of the IMF team's visit, Mr. Lopez Murphy issued the following statement:” The IMF team had constructive discussions with the authorities Mozambican policies on fiscal, financial and structural policies needed to support macroeconomic and financial stability, create jobs and improve growth in the medium term.

Economic activity is gradually recovering after a strong slowdown between October 2024 and March 2025. Tax revenue has increased by 2.6% over one year in the second quarter of 2025, after a drop of 4.2 % in the first quarter. By 2025, GDP growth is expected to reach 2.5 %, thanks to the resumption of economic activity, especially in the second half of the year, driven by the recovery of the service sector.

Inflation remains contained in a context of conditions difficult finances. In July, inflation stood at 4 per cent over one year, below the implicit target of 5%. The Bank of Mozambique has started a easing cycle in January 2024, lowering its key interest rate by 700 basis points to date (at 10.25%). The central bank has also reduced the reserve requirements on deposits in local currency, from about 39% to 29%, at the end of January 2025, thus providing additional support to the economy.

The current account deficit remained moderate at 1.3 billion dollars in the first half of 2025, reflecting financial conditions difficult and foreign exchange shortages that are weighing on imports. The gap between the official and parallel exchange rates was higher at the former semester 2025 than in 2024.

“The budget deficit reached 2.4% of annual GDP in first half of 2025, compared to 2.8% in the first half of 2024. The pressures fiscal policies have persisted not only because of low revenues fiscal policies — affected by the slowdown in economic activity — but also because public spending has continued to grow at a faster pace fast, widening the gap even further.

Faced with external and budgetary imbalances, the team of the IMF recommended that the authorities take decisive action to restore macroeconomic stability, improve the prospects for growth, facilitate job creation and reduce poverty. One Accelerated fiscal consolidation is needed to restore sustainability fiscal, reduce financing needs and direct debt clearly towards a downward trajectory in order to reduce vulnerabilities related to debt, while creating fiscal leeway to support the development and protect the most vulnerable. Greater flexibility of exchange rate is needed to ease exchange pressures and facilitate the reduction of external imbalances.