8 January 2016

Mozambique: 2015 Inflation Goes Above Ten Per Cent

Maputo — Inflation in Mozambique in December, as measured by the consumer price indices of the three largest cities (Maputo, Nampula and Beira), was 4.76 per cent, the National Statistics Institute (INE) announced on Friday.

This was by far the largest monthly rise in prices of 2015, and it brought the accumulated inflation for the year to 10.55 per cent.

Most of the December inflation is accounted for by food prices. The average price of tomatoes in the three cities rose by 28.1 per cent, and of maize by 22.9 per cent. Other significant price increases were for rice (12.9 per cent), maize flour (3.8 per cent), cooking oil (11.5 per cent), onions (11.5 per cent), and frozen fish (4.22 per cent).

There were minor increases in other items in the basket of goods and services on which the consumer price index is based - thus the price of clothing and footwear rose by 0.24 per cent, or transport by 0.2 per cent, and of leisure, recreation and culture by 0.07 per cent.

Looking back over 2015, prices rose in the first three months of the year, followed by a period of deflation, as prices fell in April, May and June. There were small prices rises in July, August and September, but then inflation took off in the last quarter of the year.

Every year prices rise in the couple of months prior to the festive season. But in 2015, inflation was much higher in part because of the sharp devaluation of the national currency, the metical, particularly in November.

In recent weeks, the metical has staged something of a recovery against the US dollar and particularly against the South African rand, the currency in which many of the country's food imports are denominated.

Pressure on prices may thus be relaxed in January.

The figures are unwelcome news for the government, which had hoped for an inflation rate of no more than 5.6 per cent in 2015.

The inflation rate of the previous two years was much lower - 3.54 per cent in 2013 and 1.93 per cent in 2014.


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