AfricaPress-mozambique: Consultant NKC African Economics said on Friday that inflation in Mozambique would rise from 3.1% last year to 5.3% this year because of the Covid-19 pandemic and the increase in the price of oil.
“We anticipate an acceleration in inflation to 5.3% this year, compared to 3.1% in 2020; the central bank had anticipated an increase in inflation with an unexpected 300 basis point hike in the key interest rate in January, but we don’t expect any further changes this year,” the analysts write in a commentary about inflation in Mozambique in May.
Deflation increased in May compared to the previous month, with the price of the basic goods basket used to calculate the Consumer Price Index (CPI) of Mozambique falling by 31 basis points from April to May, causing a 0.31% monthly deflation, but still an increase of 30 basis points from 5.19% (in April) to 5.49% in May, compared to the same month last year.
“Although continued weak domestic demand will continue to curb inflation this year, the price index will face upward pressures due to currency depreciation, rising oil prices and disruption in distribution chains,” write analysts at KC African Economics, a branch of Oxford Economics.
Last year, the metical fell 10% in a context of falling raw material prices and strong global risk aversion, while managing to recover part of this loss in the first months of the year, when it recorded a strong rise, and since stabilising.
Cumulative inflation in the first three months of 2021 is now 3.07%, while Mozambique ended 2020 with cumulative inflation of 3.52%.
The Consumer Price Index is calculated from the price variations of a basket of goods and services, with data collected in the cities of Maputo, Beira and Nampula
