IMF sees Mali growth pick-up to 4.8 pct in 2013

WASHINGTON, March 13 (Reuters) - Mali's economic prospects for 2013 are "encouraging" with the pace of growth set to increase to 4.8 percent buoyed by a good food harvest, the International Monetary Fund said on Wednesday following talks with the government.

The expected pick-up in economic activity in Mali follows a French-led military intervention in the northeast after the government appealed for help to halt advances by Islamist rebels. France said this week it expects to secure the stronghold of Islamist militants by the end of the March.

Donors also recently resumed budget support and project aid to Mali after suspending assistance since the country's March 2012 coup. The country is a leading producer of gold and cotton.

Mali's gross domestic product in 2012 shrank by 1.2 percent and inflation increased to 5.3 percent because of a poor harvest in 2011. Inflation was likely to drop to below 3 percent this year, the IMF said.

"Several donors announced the resumption of their development aid following the adoption by the government of a road map to re-establish the administration in the North and organize elections," the IMF said.

It said the government was preparing a supplementary budget to allocate that aid. "It will be used to finance implementation of the road map and to support the private sector by paying arrears and by resuming capital spending," the IMF added.

The IMF said Mali's defense spending should remain under control given that the military intervention was led by foreign troops.

The IMF said, however, Mali faced urgent development needs and would seek to plug a budget financing gap for 2013 and beyond during a meeting with donors in Brussels in May.

The IMF agreed to release an ${esc.dollar}18 million loan to Mali on Jan. 28 to help stabilize the economy.