February 28, 2018 / 4:33 PM / 20 days ago

IMF expects Mozambique to default on external debt until 2023 - Bloomberg

(Reuters) - The International Monetary Fund expects that Mozambique will not make payments for at least five more years on about $2 billion of loans which led to a default last year, Bloomberg reported on Wednesday.

International Monetary Fund (IMF) logo is seen at the IMF headquarters building during the IMF/World Bank annual meetings in Washington, U.S., October 14, 2017. REUTERS/Yuri Gripas

An Article IV report and an associated Debt Sustainability Analysis obtained show that the Mozambique government has amassed $710 million of arrears on the debt most of which it previously hid from the Washington-based lender, Bloomberg said. bloom.bg/2HPppHQ

“Arrears are expected to accumulate until 2023, when Mozambique will start producing gas from large offshore deposits,” the IMF said.

Debt-ridden Mozambique has been in turmoil since the 2016 discovery of previously hidden loans granted to three state-owned companies, which led the International Monetary Fund and Western donors to halt budget support, triggering a currency collapse and debt defaults as well as hitting economic growth.

Reporting by Rishika Chatterjee in Bengaluru

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