Annual inflation in Mozambique has almost reached ten per cent, according to the National Statistics Institute (INE), thus threatening the government’s target to keep inflation to a single digit.
The INE’s latest figures, based on the consumer price indices of the three largest cities (Maputo, Nampula and Beira), show monthly inflation in May of one per cent. This is slightly lower than the April inflation of 1.13 per cent, but these figures come at a time when, in previous years, inflation was on the decline.
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The usual trend is for a rise in prices in the initial months of the year, followed by a decline, often into negative inflation (deflation) in the winter months as the main harvest comes in, and then renewed price rises as the festive season approaches.
Thus, in both 2020 and 2021, May was a month of deflation. The average level of prices fell by 0.6 per cent in May 2020, and by 0.31 per cent in May 2021.
Inflation in the first five months of 2022 was 5.56 per cent. For the same period in 2020 inflation was 1.13 per cent, and in 2021 it was 3.02 per cent.
Annual inflation (1 June 2021 to 31 May 2022) was 9.31 per cent – up from 7.9 per cent in April and 6.67 per cent in March. If monthly inflation exceeds one per cent in June or July, then annual inflation is almost certain to exceed 10 per cent. The last month when annual inflation was more than 10 per cent was September 2017.
The most significant price increases in May were for bread (15.6 per cent), soap (5.2 per cent), vegetable oil (3.7 per cent), diesel (2.9 per cent), and petrol (2.1 per cent).
Some goods fell in price – notably coconuts (down by 6.4 per cent), cabbage (six per cent), and dried fish (3.5 per cent). But this could not compensate for the bread and fuel price rises.