The International Monetary Fund has concluded a staff visit to Mozambique, holding initial discussions with authorities on policies needed to restore macroeconomic stability and debt sustainability as the country faces headwinds from the Middle East conflict and recent climate shocks, the Fund said on June 12.
Mozambique's economic activity is gradually recovering from a contraction in 2025, but growth remains subdued, according to an IMF staff team led by Mr. Lopez Murphy. Inflation has risen recently, although from moderate levels. Fiscal imbalances narrowed in 2025 amid tight financing conditions, but the IMF noted that fiscal and debt vulnerabilities persist.
External imbalances widened in 2025, driven by weaker exports and higher imports associated with large investment projects. Persistent foreign exchange shortages continue to weigh on imports and broader economic activity, the Fund said.
The war in the Middle East, which has driven up fuel and fertiliser prices, is hitting Mozambique at a time when growth remains weak, including due to recent climate shocks, leaving limited room for policy manoeuvre, according to the IMF. The Fund described these developments as posing additional downside risks to growth and upside risks to inflation.
The discussions between IMF staff and Mozambican authorities focused on several priority areas: further improving the fiscal position in a sustainable manner while protecting vulnerable populations, strengthening the monetary and exchange rate policy framework, preserving financial stability, improving governance, and fostering private sector-led growth.
The IMF team discussed with the authorities their request for a Fund-supported arrangement and will return to Maputo in the coming months to further discuss the request and the authorities' policy plans, the statement said.
Mozambique has faced a difficult economic environment in recent years, with the combination of external shocks, climate-related disasters, and structural challenges constraining growth. The country's large natural gas projects have drawn significant investment but have not yet translated into broad-based economic gains, while public debt levels remain elevated.
The IMF team met with Finance Minister Carla Loveira, Bank of Mozambique Board Member Maria Esperança Mateus Majimeja, and other senior government and central bank officials, as well as representatives from the private sector and development partners.
The effectiveness of any future IMF-supported programme will depend on the authorities' ability to implement fiscal consolidation measures while maintaining social protections, and on the trajectory of external financing conditions. The broader regional economic environment, including the impact of higher energy and food prices on neighbouring economies, will also factor into Mozambique's recovery prospects.
