Inflation at 2.9% in 2020

Oxford Economics today revised slightly upwards the inflation forecast for Mozambique, now anticipating a rise in prices of around 2.9%, driven by product shortages due to disruptions in supply chains. “Mozambique is a net importer of most consumer goods and therefore a weaker currency is strongly associated with higher prices for the consumer,” analysts wrote in a note on the forecast of price developments. In the analysis, Oxford Economics writes that “supply chain disruptions and the consequent shortage of products due to the impact of the new coronavirus pandemic will push up the prices of some consumer goods”.

 

Oxford Economics thus forecasts, following the 6% depreciation of the metical since the beginning of the year, a slight increase from 2.8% to 2.9%, pointing out that “despite weaker domestic demand and much lower oil prices this year will contain the increase in inflation, the main risk of this forecast is an increase in prices above the estimated”. According to the latest available figures, 12-month average inflation in Mozambique fell slightly in March to 2.69%, compared to 2.75% in February, according to data from the National Statistics Institute (INE). The Consumer Price Index (CPI) worsened 0.22% in the third month of the year, contributing to year-on-year inflation of 3.09% – also slightly below the 3.55% registered in February. Food and non-alcoholic beverages were the products that contributed most to inflation in March, according to the CPI bulletin. CPI figures are calculated based on price changes of a basket of goods and services, with data collected in the cities of Maputo, Beira and Nampula.