Cost of living
The cost of living in the country remains high, although it is registering a relative reduction in relation to the last months of last year. Data released by the National Statistics Institute (INE) indicate that the general price level (inflation) increased by 20.56% in January this year when compared to January 2016 (year-on-year inflation). This is a reduction of 3.11 percentage points (pp) compared to the same period last year, ie the price increase in December 2016 when compared to the December 2015 price increase.
The data refer to the behavior of prices in the three largest cities in the country, namely Maputo, Beira and Nampula, also known as the Consumer Price Index (CPI) in Mozambique and show that in monthly terms, that is, inflation in January compared to December, there was an increase of 2.15%, a deceleration of 0.39pp compared to a rise of 2.54% in December compared to November 2016.
According to the INE's newsletter, from the point of view of annual inflation, the price increases of the clothing and footwear divisions with 30.65% and food and non-alcoholic beverages with 29.95% had significant weight.
On a monthly basis, ie January inflation compared to December, there was a rise of 2.15%, a deceleration of 0.39pp compared to a rise of 2.54% in December compared to November 2016. Between December 2016 and January 2017, food and non-alcoholic beverages are again among the products whose prices increased the most with a contribution of 1.39pp.
Considering the increase in prices per product, the increase in prices of tomato (20.0%), coal (13.1%), coconut (17.6%), peanut (12.9%) , Horse mackerel (4.6%), and butter beans (7.8%). These products were responsible for about 0.97pp positive
Total monthly inflation.
INE also noted that the city of Beira registered the highest monthly inflation (2.97%), followed by Nampula with 2.92% and Maputo, with 1.46%. In year-on-year terms, the trend was similar: the city of Beira was the one that had the greatest worsening of the general price level with 24.20%. Nampula and Maputo registered price increases of 22.97% and 18.13%, respectively.
Last year was characterized by a historic price hike in the country, which significantly reduced the purchasing power of households and businesses. Inflation closed the year with an average of 19.85%, one of the highest in recent years. The cause was linked to the deterioration of almost all the macroeconomic indicators, mainly the depreciation of the metical against the US dollar and the rand of South Africa. One dollar saw a jump of 30 meticais to more than 80 meticais in a period of approximately one year, which significantly increased imports, in a scenario of deep domestic production deficit and consequent high import dependence.
For this year, the Central Bank establishes an inflation target in the order of 14%, well below the levels that occurred last year.
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