The Business Robustness Index, during the first quarter of this year, increased by one percentage point, from 27% to 28%.

According to the president of the Confederation of Mozambique Economic Associations (CTA), the main drivers of this increase were the beginning of the agricultural marketing campaign; the export season for products such as cotton and shrimp, and the improved performance of the tourism sector mainly in provinces such as Inhambane and Manica.

"From our perspective, this performance was not more pronounced because of the impacts of rising fuel prices whose effects were directly reflected in the transportation sector, which also faced rising maintenance costs," he said.

According to the president of the CTA, Agostinho Vuma, quoted by the newspaper Notícias, it is important to note that the fuel sector has a transmissive effect on the economy, which has led to the worsening of the prices of goods in the economy.

The source, who was speaking yesterday in Gaza province, during the 9th edition of the Economic Briefing, organized by his association, also said that with regard to the employment index, following the trend of the business robustness index, it showed a slight improvement, which denotes a greater prospect of the private sector to generate employment in the II Quarter of this year in relation to the I Quarter.

"Meanwhile, the labor market remains fragile, with a preference for hiring temporary or part-time labor, especially in the agricultural and construction sectors," he stressed.

As prospects, he added, it is expected that in the III quarter business activity will continue on an upward trend. However, there is a risk of an environment characterized by persistent high prices of goods and services whose impact may be the reduction of demand and consequently the retraction of operating profits.

"To cope with the price hike and increase production and productivity, in order to provide the country with better conditions to absorb external shocks, the CTA has advocated the adoption of measures," he stressed.

According to Vuma, fuel also indirectly affects the price of other products that make up inflation.

"The Russia/Ukraine conflict is an exogenous factor and specifically affects the price of grain and fuel," he stressed, urging a reduction in import taxes, particularly on fuel, which can weigh as much as 60 percent.

"It is important that actions are taken for local production. Monetary policy, in trying to reduce inflation by raising the interest rate, in an exogenous factor, ends up being ineffective because it does not contain inflation and strangles the business sector, particularly the productive sector," he noted.