By Charles Mangwiro MAPUTO, Dec 21 (Reuters) - AIDS is emerging as a major threat to Mozambique's economic development and the government must work harder to combat the epidemic, an International Monetary Fund (IMF) official said on Thursday. "HIV/AIDS is hindering development ... it's a major risk for a sustainable economy because capacities in this country are very limited," IMF resident representative Felix Fischer told Reuters in an interview in the capital Maputo. "Obviously if the mortality rate due to AIDS increases, you lose a lot of capable people who have just been trained, so the containment of AIDS is absolutely crucial," he said. UNAIDS, the United Nations's AIDS umbrella organisation, says Mozambique's HIV/AIDS epidemic is "dramatically worsening" with the percentage of adults infected with the virus doubling to 16.2 percent between 1998 and 2004. The Health Ministry estimates that there are now almost 1.6 million people in Mozambique, mostly aged between 14-29, infected with HIV or living with AIDS and a further 500 people become infected each day. President Armando Guebuza has also highlighted the threat of AIDS, saying this week that the disease had become "a major obstacle to development" in the southern African nation. "What makes the scenario more dramatic is that many of the more than 1.5 million Mozambicans infected do not know they are carrying the HIV virus they only seek assistance in the last stages of their lives," Guebuza said in his state of the nation speech on Monday. Fischer said the IMF and the government would meet next March as part of a series of reviews of the Poverty Reduction and Growth Facility (PRGF) extended to Mozambique and that the government's AIDS strategy would be in focus. "Each of these reviews will look at a number of areas of progress, AIDS included," he said. On Wednesday, the IMF approved a further US$2.4 million for Mozambique under the fund's PRGF. Fischer said the IMF was satisfied with Mozambique's progress, and total PRGF disbursements have risen to about US$14.6 million thanks to prudent government macroeconomic policies and its first wave of structural reforms. "Together they had yielded strong economic growth, moderating inflation and making solid progress towards the objectives set out in the poverty reduction strategy," he said. "The authorities are encouraged to take steps to address the remaining rigidities in labour market flexibility," he said. Mozambique is one of the world's fasted growing economies barely a over decade after the end of a 16-year civil conflict which ended in 1992. Mozambique has projected 7 percent economic growth in 2007, up from 6 percent this year.
