Maputo – March 5, 2025
An IMF team, led by Pablo Lopez Murphy, concluded a visit to Mozambique from February 19 to March 4, 2025, discussing the Fifth and Sixth Reviews of the Extended Credit Facility (ECF) with authorities. The talks, set to continue virtually, focused on fiscal, financial, and structural policies.

On the monetary front, the Bank of Mozambique has been proactive. Facing a slowing economy, the central bank kicked off a loosening cycle in January 2024, slashing its policy rate by 500 basis points to 12.25%—a bold move to spur activity. In late January 2025, it also lowered reserve requirements on local currency deposits from 39% to 29%, freeing up liquidity for banks. Despite supply-chain hiccups and rising food prices tied to the unrest, inflation has stayed below the implicit target of 5%. “Pressures picked up but remain controlled,” Lopez Murphy observed, commending the central bank’s steady hand under Governor Rogério Zandamela.

Mozambique’s economy contracted sharply in Q4 2024, with real GDP dropping 4.9% year-on-year due to social unrest, down from 3.7% growth in Q3. Annual growth for 2024 was 1.9%, with a projected rebound to 3% in 2025 as conditions stabilize. Fiscal slippages in 2024, driven by a bloated wage bill, threaten debt sustainability. The IMF urges cuts to wage spending and tax exemptions, prioritizing social programs and improved debt management.

Inflation remains below 5%, despite supply disruptions, supported by the Bank of Mozambique’s policy rate cut to 12.25% (down 500 bps since January 2024) and reduced reserve requirements (from 39% to 29% in January 2025).

The IMF met President Daniel Chapo, Prime Minister Maria Levy, Finance Minister Carla Loveira, Bank Governor Rogério Zandamela, and representatives from civil society, political parties, donors, and the private sector. Lopez Murphy praised the “constructive dialogue” and confirmed ongoing talks to finalize the reviews.