The economic week in Mozambique was marked by three key signals for the national economy: analysts’ warnings about the risks of the Middle East conflict on energy prices, upward revisions of inflation forecasts for the coming years, and a new decline in credit extended to the economy. At the same time, financial authorities are preparing for the next international evaluation following the country’s removal from the FATF “grey list” on money laundering.
Government Ensures Stable Fuel Prices Despite Middle East Conflict
The government has assured that fuel prices in the domestic market will remain unchanged at least until the end of April, despite growing instability in the Middle East, a strategic region for global oil supply. State Secretary for Treasury and Budget Amílcar Tivane said after the Council of Ministers session that the country currently has around 75,000 tons of fuel available in the market and approximately 85,000 tons stored in ocean terminals.
“The existing reserves are sufficient to ensure the functioning of the economy until early May,” he said, adding that gasoline is expected to continue selling at around 85 meticais per liter, and diesel at 80 meticais.
Oxford Economics Predicts Inflation Acceleration
Inflation outlook in Mozambique has worsened in recent weeks after British consultancy Oxford Economics revised its projections upward for the coming years. According to the firm, average inflation is expected to reach 5.6% in 2026, up from a previous estimate of 4.8%, and could rise to 8.4% in 2027.
The revision reflects climate shocks and international economic uncertainty. In a client note, Oxford Economics economists warned that recent developments are deteriorating the country’s price outlook. “Recent external and internal developments are not a good omen for Mozambique’s inflation prospects in 2026,” the report stated.
Factors cited include early-year floods that destroyed agricultural areas and damaged logistical infrastructure. Analysts note these impacts could translate into higher food and transport prices throughout the year. National statistics indicate that the Consumer Price Index rose 0.68% month-on-month in February, mainly due to higher food costs, with charcoal, lettuce, tomatoes, and mackerel seeing the largest increases.
Analysts Warn of Middle East Conflict Impact
The military escalation in the Middle East is raising concern among Mozambican experts, who warn of possible effects on fuel prices and the cost of living. The conflict, affecting one of the world’s main oil-producing regions, has caused energy market volatility and increased fears of disruptions to shipping routes.
International relations analyst Orlando Mazuze said the impact could be significant if instability continues. “The conflict zone overlaps with some of the world’s largest oil producers, such as Saudi Arabia, Iran, and the United Arab Emirates. Any disruption there has immediate effects on the global energy market,” he noted.
Mazuze added that reduced supply tends to drive prices up. “When production drops and supply tightens, demand remains, and oil prices rise. Being essential for all economies, this increase affects multiple sectors,” he explained.
Political analyst and university lecturer Wilker Dias said the impact will be felt most in countries dependent on energy imports, like Mozambique. “If shortages or international price increases occur, transport and food costs could rise, directly affecting citizens’ wallets,” he warned.
Credit to the Economy Declines Again
Credit extended to Mozambique’s economy fell slightly at the end of 2025, according to data from the Bank of Mozambique. Total commercial bank financing stood at around €3.9 billion in December, marking the second consecutive decline after peaking in May of the same year. Despite the recent drop, the amount remains above 2024 levels, indicating relatively stable bank financing in recent years. The pace of credit allocation, however, has been moderate.
Individuals continue to be the largest recipients of credit, with around €1.4 billion in financing, followed by the transport and communications, manufacturing, and trade sectors. Meanwhile, the reference interest rate for credit fell again in March, with the so-called “prime rate” set at 15.60%, following a 10-basis-point reduction announced by the Mozambican Banking Association.
Mozambique Prepares Post-Grey List Evaluation
Mozambique is expected to begin the international review of measures taken after its removal from the FATF “grey list” in September 2027. The Financial Intelligence Office of Mozambique (GIFiM) highlighted the need to consolidate reforms to prevent a potential return to the monitoring list of the Financial Action Task Force (FATF).
Text: Felisberto Ruco
