Maputo, June 9, 2025 (Lusa) - The Bank of Mozambique estimates that annual inflation will continue to slow in the coming months, reflecting the recent decision to exempt certain basic products from VAT and reduce toll charges by up to 60%.
"In the short term, the trend towards a slowdown in annual inflation is expected to continue, reflecting the impact of the VAT exemption on basic products (sugar, cooking oil and soap), the downward adjustment of water and toll tariffs and the fall in food prices on the international market, in a context of stability of the metical," accordong to the Economic Outlook and Inflation Outlook report, consulted today by Lusa.
The document also pointed out that the usual survey of economic agents "corroborates the outlook for a slowdown in annual inflation", as the macroeconomic expectations of economic agents revealed in the May study "point to annual inflation of 4.90% in December 2025, which represents a downward revision of 3 basis points compared to the expectations released in the April survey".
"However, considerable risks and uncertainties remain, mainly of an internal nature, which pose challenges to maintaining this scenario, notably the impacts of the worsening fiscal situation, uncertainty about the speed of recovery of productive capacity and the supply of goods and services, as well as the effects of climate shocks," the report added.
Prices in Mozambique experienced deflation in April, falling by 0.38%, primarily due to the food sector, with year-on-year inflation dropping to 3.99%, according to data from the National Statistics Institute (INE) previously reported by Lusa.
The INE's Consumer Price Index (CPI) for April indicates that Mozambique recorded a price drop of around 0.38% compared to March (up 0.06%), with the food and non-alcoholic beverages sector standing out, contributing 0.54 percentage points to the total monthly variation.
This marks the fifth consecutive month of price deflation in Mozambique, reversing a cycle of seven months of increases. The CPI recorded price falls of 0.11% in August, 0.05% in July, 0.21% in June, and 0.38% in May 2024.
The INE also reports that, compared to 2024, the CPI indicates a year-on-year price increase in April of 3.99% (4.77% at the end of March), mainly influenced by the food and non-alcoholic beverages and restaurants, hotels, cafés and similar divisions, which increased by 8.79% and 7.18% respectively in one year.
Cumulative inflation for 2024, according to previous INE data, stood at 4.15%, compared to 5.3% in 2023, but below the peak of almost 13% reached in July 2022.
The government forecasts that Mozambique will close 2025 with inflation of around 7%.
PVJ/ADB // ADB.
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