In this paper the use of a Reduced Order Extended Kalman Filter, to estimate the rotor position of a Permanent Magnet Synchronous Motor, in coordination with a Predictive Torque Controller is proposed. The observer integrates the information provided by the fundamental model and the anisotropies of the machine, allowing for a wide operation range. The scheme takes advantage of the nature of the predictive controller, which applies one switching state of the inverter at a time for a whole sampling period, eliminating problems associated with pulse width modulation at low modulation indexes.