Bank of Mozambique reiterates inflation slowdown prospects

Login

Register

http://www.clubofmozambique.com/

Bank of Mozambique reiterates inflation slowdown prospects

11:24 CAT | 20 Jul 2017

File photo / A view of Zimpeto market, in Maputo

The Bank of Mozambique’s regular bulletin on the “Economic Environment and Inflation Perspectives”, published yesterday, indicates that prospects for the coming months are for a slowdown in inflation.

This, it says, will result from an increase in the supply of agricultural products due to favourable climatic conditions and the military truce, the Metical appreciating, the fall in liquid fuel prices and the slowing of food price inflation in South Africa.

This is the same forecast as was offered at the end of last year, when inflation reached a historical peak of 25.27 percent, and the central bank began adjusting stability indicators through reference interest rates.

Inflation started to slow in April and May 2017, with the Index of Consumer Prices (CPI) increasing by only 0.75 percent (below the 2.11 percent registered in the period from February to March). This increase in prices raised cumulative inflation to 5.09 percent, below that observed in the same period of 2016 (8.47 percent), thus reinforcing the prospects of inflationary pressure slowing.

Although it still remains high, annual inflation slowed from 21.57 percent in March to 20.45 percent in May (18.27 percent in the same period of 2016), mainly driven by the slowdown in food prices.

Source: O País