The consultancy Oxford Economics Africa expects inflation in Mozambique to drop to 8.9% by the end of this year, opening room for the central bank to cut interest rates by another 50 basis points.
“We anticipate that inflation will gradually slow down to 8.9% at the end of 2023, against the same period of 2022, which will give room for the Bank of Mozambique to cut interest rates by 50 basis points during this year,” the consultancy writes.
In a commentary sent to customers, to which Lusa has also secured access, Oxford Economics Africa writes that “inflation should have reached its peak in September and will fall to single digits by the third quarter of this year, in line with an expected decline in commodity prices due to weakening global growth”.
Last week, Mozambique’s National Institute of Statistics (INE) released the figures for the rise in prices for the past year (2022), signalling an accumulated increase of 10.91% in December compared to the previous 12 months, and an average of 10.2% during the year ion question.
“Despite the expected moderation in food and energy prices since March 2022 and the stability of the metical exchange rate, inflation will remain high in the first half of this year due to the base effect, gradually slowing down to 8.9% at the end of the year,” the INE writes.
According to the INE, Mozambique recorded inflation of almost 11% in 2022, the highest figure in the last six years. Prices rose 10.91% compared to 2021, in line with the global inflationary wave.
“From January to December 2022, the country recorded a price increase of around 10.91%. The food, non-alcoholic beverages and transport divisions were the most prominent,” reads the INE’s most recent Consumer Price Index (CPI) bulletin.
Even so, in the monthly analysis, December 2022 was the fourth consecutive month of inflation slowdown, after a peak of 12.96% recorded in August.
Since October, the IPC bulletin has collected data for calculating inflation at eight locations in Mozambique, instead of the previous three. In addition to Maputo, Beira and Nampula, the prices in markets and stores in Quelimane, Tete, Chimoio, Xai-xai and the province of Inhambane are now also being sampled.
In 2016, the country registered inflation of 23.67%, falling since then to values below 7% before rising again to the 10.91% just announced.
The Mozambican State Budget for 2023 foresees an inflation of 11.5%.