WASHINGTON (Reuters) - The International Monetary Fund supports Liberia's temporary suspension of taxes on rice imports and plans to speed up commercial rice production amid soaring food prices, an IMF official said on Friday, 3 May 2008.

In a statement, Robert Powell, IMF mission chief for Liberia, said inflation is set to rise to around 13 percent due to higher rice and fuel import prices as well as strong domestic demand.

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The West African's country's economy is forecast to grow about 8.8 percent in 2008, Powell said after a visit to the capital, Monrovia. The IMF in January forecast that Liberia's economy should expand 9.6 percent this year, with inflation falling to the single digits.

Liberia has been hard hit by the sharp run-up in food prices, especially of key staple crops such as rice, fueling protests in countries in Africa, Asia and Latin America.

In Liberia's case, the country is also recovering from decades of conflict during which most of the economy was destroyed and land abandoned by people fleeing the fighting, which slashed agricultural production.

The food crisis has been triggered by global warming and drought, changing diets in fast-growing, developing countries, higher energy costs and increasing biofuels production.

Countries in Africa, including Liberia, have started schemes to revive their flagging farm sectors, which stagnated during decades of under-investment and conflict.

Powell said discussions with Liberian authorities also looked at the government's economic program and reforms under the so-called IMF-supported Poverty Reduction Strategy (PRS).

"The mission argued that to help reach these goals, the authorities should further refine the costing of PRS measures and that donors should align their commitment with the PRS priorities at an early stage," he added.