Azernews.Az

By Bloomberg

The International Monetary Fund expects Mozambique’s economy to grow 7 percent in 2015, a year it said could see decisions to develop gas fields in the country and prompt “one of the largest investments ever seen in Africa.”

The gas ventures in northern Mozambique could require investment of as much $100 billion, the Washington-based lender said in a report published Tuesday after a staff mission to the southern African country. Risks to economic growth include declining commodity prices and the need to cut public spending, the IMF said.

Mozambique could become one of the world’s three largest exporters of liquefied natural gas in the next decade, according to Anadarko Petroleum Corp., which leads one of two gas projects in the Rovuma Basin off the north coast. The IMF mission said it was encouraged by positive developments in the last few months, including new laws that could help bring the projects to a final investment decision, or FID, in 2015.

Anadarko, based in Woodlands, Texas, said last month that FID this year is “still doable.” Rome-based Eni SpA, which leads the second project, has said it expects to reach FID in the third quarter of this year.

Mozambique appears to be bringing public spending under control after a large fiscal expansion in 2014, the final year of Armando Guebuza’s 10-year tenure as president, the IMF said Tuesday. The country’s budget deficit rose last year to exceed 10 percent of gross domestic product. Mozambique will reduce public spending by 3 percent of GDP this year, the IMF said.

Inflation will jump to 5.5 percent this year from 1.1 percent in 2014, the IMF said, without elaborating. Mozambique’s central bank said Monday in its monthly monetary policy statement that inflation in major cities fell below zero in April, with prices declining by almost 1 percent.