Standard Bank Mozambique expects a slight reduction in inflation

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Standard Bank Mozambique expects a slight reduction in inflation, which has been rising in recent months, but adds that this will happen before the end of the year, when it is forecast to reach an average of 11.7%. The peak, estimated at 12.2%, might have already occurred in August.

Standard Bank Mozambique’s chief economist, Fáusio Mussá, says this scenario is due to a series of internal and external shocks to which the national economy has been exposed, with the emphasis on the impact of climate change on the price of food and of the war in Ukraine on fuel prices, with ripple effects on other prices in the economy.

To respond to these threats, Mussá explains, the government announced, for example, its intention to subsidise transport, as well as a fuel import component designed to guarantee price stability, “especially because the most vulnerable layers of our society are the who are most affected by the impact of rising fuel prices”.

“In this scenario, our expectation is that the Bank of Mozambique will maintain the current 15.25% monetary policy reference interest rate (MIMO) until the end of the year, but there is no guarantee of this, especially if there is any surprise that translates into higher than expected inflation,” Mussa underlined.

Source: O País