Maputo — Hopes that Mozambique's 2007 inflation rate could be kept below 10 per cent were shattered by price rises in December, according to the latest figures from the National Statistics Institute (INE).

Combining the consumer price indices of the three main cities, Maputo, Beira and Nampula, the INE concluded that the accumulated inflation in 2007 was 12.1 per cent, much higher than the government's target of 6.4 per cent.

The inflation rate remained low for the first half of the year. By May prices had risen 4.31 per cent. In June, prices actually fell - to 3.96 per cent. Inflation continued to creep upwards in the following months, but had still only reached 5.21 per cent by the end of September.

But the figure rose to 6.6 per cent in October, 8.63 per cent in November and finally 12.1 per cent at the end of the year.

When the three cities are looked at separately, Maputo turns out to be cheaper than either Beira or Nampula. The annual inflation rate in Maputo was 10.26 per cent, in Beira 14.78 per cent and in Nampula 13.32 per cent.

In all three cities, food and drink prices were the main determinant of inflation. There were sharp rises over the year in the price of imported wheat flour, and hence of bread. Thus in Maputo bread prices rose by 23.7 per cent, in Beira by 50 per cent, and in Nampula by 39.1 per cent.

The price of fish (fresh or frozen) rose by 25 per cent in Maputo, 31.3 per cent in Beira, and 21.6 per cent in Nampula. Cooking oil was up by 11.5 per cent in Nampula and by 41.7 per cent in Beira.

However, if inflation is looked at in terms of 12 monthly averages, the government can take some comfort. This average rate of inflation fell from 12.89 per cent in January to 9.17 per cent in December.

In calculating the inflation rate, the INE uses the prices of 245 goods and services. It collects the prices of fresh produce every week in 30 markets in the three cities, and the prices of non-perishable goods every month in 597 shops and markets.