IMF worried over China's $ 5 bln loan to DRCongo

KINSHASA, Oct 3 (Reuters) - The International Monetary Fund warned Congo on Wednesday to beware of the macroeconomic effects of a planned billion loan from China to modernise the vast African country's decrepit infrastructure and mining industry.

President Joseph Kabila's government announced plans last month for the huge loan from China, which would be paid back partly in mining concessions and tolls from road and railways.

''We must beware of the macroeconomic impacts of such a project,'' the Washington-based fund's country representative, Xavier Maret, told a news conference in Democratic Republic of Congo's capital Kinshasa.

''We are not talking about a small amount -- we are talking about a very large amount which will have not insignificant macroeconomic impacts on imports, exports, and I would say even on the exchange rate, we must not forget that, (and) in budgetary terms,'' he said.

Maret said Congo's economic growth will quicken to 6 percent in 2007 from 5 percent the previous year, but will fall short of the 6.5 percent the IMF had initially hoped for.

He said inflation was projected to fall to 9 percent at the end of 2007, in line with a target to bring inflation into single figures from over 21 percent in 2005.

Reuters SI