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Mozambique economy up 6.5%: IMF

Maputo - Mozambique's economy grew 6.5% last year, making it one of the best performers in sub-Saharan Africa, the International Monetary Fund said Friday.

But the global lender lamented the slow pace of poverty reduction in a country marked by double-digit inflation and where deadly food riots erupted last year.

"Economic growth in 2010, at an estimated 6.5%, fell slightly short of expectations but was one of the highest in sub-Saharan Africa," IMF country representative Victor Duarte Lledo said in the capital Maputo.

"Going forward, growth is projected to accelerate and return to levels observed before the global financial crisis."

Inflation was 13.8%, due mainly to rising global food costs, according to national figures. Lledo said that "has continued to place a considerable burden on the most vulnerable segments of the population".

Violent protests against bread, electricity and water price increases in September last year killed 14 and wounded hundreds.

The government has since heavily subsidised fuel and food, an "important and courageous" decision, said Lledo.

The subsidies will be phased out this year to curb the costs to the state, which relies on foreign aid for 46 percent of its revenue.

"Notwithstanding Mozambique’s high economic growth over the last two decades, poverty has not declined as fast as in other sub-Saharan African countries," Lledo said.

Over half of the country's 21 million people live below the poverty line.

The IMF encouraged Mozambique to improve labour-intensive sectors like agriculture in its poverty-reduction policies.

It expects economic growth in 2011 to reach 7.2%, with inflation tipped at 8.4%.
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