Consultancy Oxford Economics Africa this Sunday, 22 January said that inflation in Mozambique is expected to slow to 8.9 percent by the end of this year, opening up room for the central bank to cut interest rates by another 50 basis points.
“We anticipate that inflation will gradually slow down to 8.9 percent by the end of 2023 year-on-year, which will provide room for the Bank of Mozambique to cut interest rates by 50 basis points during this year,” the analysts wrote.
In a commentary on the latest Mozambican inflation figures for 2022 sent to clients, Oxford Economics Africa writes that “inflation is expected to have peaked in September and will fall to single digits by the third quarter of this year, in line with an expected decline in commodity prices due to weakening global growth.”
Last week, the National Statistics Office released price rise figures for last year, pointing to a cumulative increase of 10.91% in December compared to the previous 12 months, an average of 10.2% during that year.
“Despite the expected moderation in food and energy prices since March 2022 and the stability of the metical exchange rate, inflation will remain high in the first half of this year due to the base effect, gradually slowing to 8.9 percent by the end of the year,” the analysts write.
Mozambique recorded inflation of almost 11 percent in 2022, the highest value in the last six years, the National Statistics Institute (INE) announced.
Prices rose 10.91 percent over 2021, in line with the global inflationary wave.
“From January to December 2022, the country recorded a price increase in the order of 10.91%. The food, non-alcoholic beverages and transport divisions were the most prominent,” reads the latest Consumer Price Index (CPI) bulletin.
Still, in the monthly analysis, December 2022 was the fourth consecutive month of slowing inflation, after a peak of 12.96% recorded in August.
Since October the CPI bulletin has collected data to calculate inflation in eight points around the country, instead of three.
In addition to Maputo, Beira and Nampula, prices in markets and shops in Quelimane, Tete, Chimoio, Xai-xai and Inhambane province are now also analysed.
In 2016, the country recorded inflation of 23.67 percent, falling to below 7 percent since then, to the 10.91 percent now announced.
The Mozambican State Budget for 2023 projects inflation of 11.5%.