The IMF has made a broadly positive assessment of Mozambique's economic policy performance following a mission to the country that concluded on April 7th, as part of the annual Article IV consultations between the Fund and member states. The IMF has also concluded the second review of the policy support instrument (PSI). The Fund noted the resilience of the Mozambican economy, with real GDP growth reaching a brisk 6.5% in 2010, although this was slightly below expectations. Nonetheless, the IMF expects growth to accelerate in 2011, buoyed by mega-projects, particularly in the mining sector, and returning to the levels experienced before the beginning of the global economic crisis in 2008. The Fund noted that, although export growth had more than offset the rise in the import bill owing to the spike in global fuel and food prices, rising commodity prices had stretched household budgets, particularly those of the poorest. Accordingly, the IMF has endorsed the authorities' focus on maintaining tight monetary policy to bring inflation into single digits by the end of the year.

The government is to continue and deepen its medium-term development strategy. This is based on investment in infrastructure and priority social spending, as well as its structural reform agenda, involving public financial management, tax administration, debt management, and financial sector development and supervision. A new poverty-reduction strategy, known by the Portuguese acronym PARP, is to be finalised and submitted to cabinet shortly. The PARP is expected to give greater clarity and direction to the government's aim of making economic growth more inclusive, by creating jobs and accelerating poverty reduction. Success in these areas will require stronger commitment to structural reforms and policies to raise productivity, particularly for labour-intensive industries, where performance has lagged behind the country's rapid rates of overall economic growth. Improving agricultural productivity, which is still far below the average for Sub-Saharan Africa, is a priority. Policies for social protection, meanwhile, will need to be fiscally sustainable and targeted more effectively at the vulnerable, rather than involving general programmes that often benefit richer groups. Mozambique's Article IV consultation and PSI are scheduled to be discussed by the board of the IMF in June.