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BoM: Inflation Expected to Rise By Year-End

BoM: Inflation Expected to Rise By Year-End

The Bank of Mozambique has acknowledged that inflation will still accelerate until the end of the year, influenced by the reduction in the supply of agricultural products and the possibility of an increase in fuel prices.

“The short-term outlook points to a slight acceleration in inflation in the fourth quarter of 2023,” said the Economic Situation and Inflation Outlook report, finalised this month by the Bank of Mozambique and which Lusa accessed on Monday.

“These forecasts stem from the lower supply of agricultural products produced in the country, the start of the festive season and the increase in food prices in South Africa, in a context in which the effects of ‘El Niño’, the approach of the cyclone season and the possible upward adjustment of fuel prices prevail as risks,” it reads.

Twelve-month inflation in Mozambique had already accelerated in October, to 4.75%, compared to 4.63% in September, reversing the downward trend seen in the last seven months of the year and “reflecting the increase in the prices of imported food products”.  

“Even so, in the short term, the outlook for single-digit inflation remains,” the central bank said in the same report.

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In the opposite direction, the Bank of Mozambique said economic agents “revised their inflation outlook for December downwards” to 4.61%, against the forecast of 5.70% a month ago.

In June, businessmen predicted a 12-month inflation rate of 8.82% at the end of December.

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