London, July 14, 2025 (Lusa) - British consultancy Oxford Economics said on Monday that inflation in Mozambique will average 4.4% in 2025, but will see a “sharp increase” next year due to the likely devaluation of the metical.

“Because foreign exchange reserves remain limited, public debt is rising and the currency is overvalued, we expect market forces to press the Mozambican authorities to devalue the currency in 2026, and we therefore anticipate a sharp rise in inflation in 2026,” the analysts write in a commentary on inflation in June, when it rose 4.15% compared to the same period in 2024.

The slight increase in the general price level to 4.15% is in line with the forecast of 4.4% for the total for this year, according to analysts from the African department of this British consultancy.

In the commentary sent to clients, to which Lusa had access, Oxford Economics states that “although consumer prices surged in early 2025 because of violent public unrest that disrupted economic activity, inflation is expected to slow in the rest of the year,” helped by the downward trend in oil prices, which leads to cheaper transport.

In addition, they add, the slowdown in food price rises “probably reflects the recovery in economic activity and the gradual reopening of supply chains” following the social unrest in the last quarter of last year.

The Consumer Price Index (CPI) for June from the National Statistics Institute (INE) recorded a year-on-year price increase in June of 4.15% (4.0% at the end of May and 3.99% in April), The food and non-alcoholic beverages divisions, along with restaurants, hotels, cafés and similar establishments, increased by 9.38% and 8.53% in one year, respectively, and they mainly drove this influence.

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 expects Mozambique to close 2025 with inflation around 7%.

MBA/ADB // ADB.

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