Mozambican economists Estrela Charles and Elcídio Bachita today advocated measures with a direct impact on the poorest layers of the population in the face of rising inflation in the country, warning of the risk of "social breakdown.

"We are in a situation of almost rupture in terms of dissatisfaction of the population. With these levels, with this tendency to increase prices, we will have a situation of great dissatisfaction, great inequality and great social exclusion," Estrela Charles, economist and researcher at the non-governmental organization (NGO) Center for Public Integrity (CIP), told Lusa.

Considering "palliative and theoretical" the measures that have been put forward by the executive to alleviate the impact of rising prices, Charles argued that the universe of social protection should be widened, covering more beneficiaries of vulnerable social classes and the unemployed, and strengthening the state sector of public transport, to apply social fares for users who cannot afford to use privately-managed public transport.

"The government should focus more on the consumer and not on the companies, because subsidies to companies do not have a direct impact on the consumer and do not influence the purchasing power and the standard of living of the final consumer," he stressed.

Estrela Charles emphasized that the government must withdraw resources spent on privileges attributed to the high cadres of the state and channel them into social spending, through a serious austerity policy.

"Top state officials enjoy subsidies and luxury cars, while civil servants can't even afford to take public transportation," the economist compared.

Estrela Charles pointed out that the rise in fuel and food prices, due to the Russia-Ukraine war, has aggravated the trend of rising inflation in Mozambique, considering that the African country is an importer of these goods.

At the beginning of the year, he continued, "the Government was being very optimistic" and "predicted about 5% annual inflation, but by February there was already a trend of rising prices, which is getting worse with the increase in fuel and food costs and devaluation of the euro."

For his part, economist Elcídio Baptista advocated fiscal measures with a focus on taxes and import duties on fuel and food so that high inflation does not deteriorate the already precarious living conditions of the poor population.

Although the government has already touched Value Added Tax (VAT) rates to mitigate the impact of the covid-19 pandemic, "there is still some room for further tax relief, at least at the food product level and in the short term," he noted.

On the other hand, he continued, the central bank must curb the impetus for raising interest rates, because the current upward trend in inflation does not have a monetary matrix.

Warning that "importing goods and services is also importing inflation", Elcídio Bachita defended the bet on national production in the areas in which the country has potential, especially in agriculture, so that Mozambique is not overly exposed to fluctuations in international markets.

Year-on-year inflation in Mozambique was 10.81% in June, the highest in the last four years and nine months, the National Statistics Institute (INE) announced.

Year-on-year inflation in May had been 9.31% and rose 150 basis points in June, according to the new Consumer Price Index (CPI) bulletin.

You have to go back to August 2017 to find a higher figure: at that time, inflation was 14.13%, in the wake of the shock caused by hidden debts.

The rise that has taken place since the beginning of the year is in line with all forecasts and the global inflationary climate caused by the war in Ukraine and rising fuel prices.

The food, non-alcoholic beverages and transport divisions were the biggest contributors to the price increase in Mozambique.