NKC African Economics predicted Tuesday that inflation in Mozambique should accelerate from 3% in 2020 to 4.3% this year, warning that the metical had already dropped 18% last year
“Despite weak domestic demand, with a slight GDP growth of 0.8 percent this year, better than the drop of 0.3 percent in 2020, which will continue to slow inflation, there are risks to rising prices,” analysts wrote in a commentary on annual inflation.
Prices rose for the fourth month running in December from 3.2% in November to 3.5% in December compared with the same period in 2019, according to official figures, leading analysts to anticipate a 4.3% rise for the year as a whole.
“The metical fell by almost 18% in 2020 against a background of falling prices for Mozambique’s exports of raw materials and global risk aversion,” the analysis noted that as the country is a net importer of consumer goods, a weaker currency is generally associated with a rise in prices for consumers.
“In addition, we anticipate that the average price of oil will rise by almost 20% this year and supply chains also face possible disruptions due to the covid-19 pandemic, insurgency in Cabo Delgado and the risk of flooding,” the analysts conclude.
Lusa
