The rising cost of living, apparently running counter to inflation forecasts – Watch

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The rising cost of living, apparently running counter to inflation forecasts – Watch

1:24 CAT | 09 Jun 2020

Photo: Miramar

The rise in prices of basic products worries consumers already stretched financially since the outbreak of the pandemic. Sugar, for example, now costs 75 meticais a kilogram.

Prices are already putting pressure on household budgets. Take Lucília, for instance, interviewed below.

The increases are forcing reallocations in the family budget.

The price of sugar, which had risen from 65 to 85 meticais per kilogram, has yet to stabilise, and still hovers around 75 meticais. Eggs are also still up in price, a dozen now costing 120 meticais against the previous 90. Rice, too, has gone up – from 1,050 meticais for a 25 kg bag to 1,225.

In the streets, concern rises accordingly.

The Oxford Economics consultancy in the meantime expects the inflation rate in Mozambique to remain at 2.9 percent this year.

Traders believe the situation is still just about bearable, but do not rule out even more difficult scenarios ahead. If prices continue to rise, innovation will be key.

According to the Oxford Economics analysis, Mozambique imports most of its consumer goods, and a combination of a weaker currency associated with high prices and disturbances in the production chain may contribute to a rise in inflation.