Mozambique: Central bank revises inflation projection upwards

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Mozambique: Central bank revises inflation projection upwards

1:17 CAT | 04 Mar 2020

File photo: Lusa

The Bank of Mozambique expects an increase in the cost of living in the coming months. It also expects an improvement in economic growth by the end of the first quarter of this year.

In its most recent analysis of Mozambique’s main macroeconomic indicators, the country’s central bank revised its projections for the coming months on inflation and pressure on domestic debt upwards.

Regarding inflation, which accelerated to 3.48% at the beginning of the year, the Bank of Mozambique, says that it arises essentially from upward adjustments in the level of the impact of climate shocks on future price dynamics, combined with the metical’s depreciation prospects in the short term and the trend towards rising food prices in international markets.

High levels of public debt also stood out. The state issued new treasury bills worth five billion meticais, and 498 million meticais in treasury bonds, increasing debt by about 5.4 billion meticais to 145.5 billion meticais between December and February.

The Bank of Mozambique does however foresee an improvement in the growth of gross domestic product (GDP), sustained by the recovery of the agriculture and construction sectors in the wake of post-cyclone reconstruction efforts and by continued improvements in investor confidence because of the payment of arrears to suppliers of goods and services to the state.

By Edson Arante

Source: O País