Consumer spending to remain low for a while in Mozambique

Login

Register

http://www.clubofmozambique.com/

Consumer spending to remain low for a while in Mozambique

1:44 CAT | 15 Mar 2017

File photo

The Mozambican economy has been in crisis since last year, with the rising cost of living forcing economic agents to adopt cost containment measures. Mozambique’s Confidence and Economic Environment Indicator (published by Natonal Statistics Institute INE) however predicts that prices will slow down in the coming months.

INE conducted an assessment of demand in the near future (demand perspective) and concludes that it could fall, interrupting the positive tendency seen at the end of last year.

The INE’s newsletter explains that the unfavourable outlook for demand is due to negative assessments by entrepreneurs in the transport, industrial production, trade and non-financial services sectors, although there are encouraging forecasts from operators in the accommodation, catering and construction sectors.

The reduction in demand is a reflection of the austerity which the crisis has made the rule for families, companies and the state.

Overall, however, the economic climate indicator was favourable at the beginning of this year, consolidating the improving trajectory seen since November 2016. The favourable economic environment was influenced mainly by good employment prospects over the coming months signaling signs of recovery in the economic situation.

Prices will tend to reduce

In contradistinction to general price inflation, sitting at 20.88 percent in February, the INE forecasts that prices will slow down in the coming months.

“The price outlook indicator decreased, thus interrupting the upward trend of the last months of 2016. The fall in the price perspective is due to the expected decrease in future prices in all sectors, with the broader range occurring in the sectors of trade and industrial production,” the document says.

The government predicts an average inflation of 14 percent this year, well below the close to 20 percent registered last year.

Source: O País