The Oxford Economics Africa consultancy has revised its inflation forecast for Mozambique to 7.3% in 2022, accompanied by a rise in prices by 7.8% in January, the highest in five years (2017).

The consultant says that last month's inflation was mainly due to the recent adjustment in fuel prices and continued food inflation.

Oxford Economics Africa writes that "consumer price index inflation increased 1.1 points to 7.8% in January, when it had a year-on-year increase of 6.7% in December."

Inflation registered an increase of 5.7% in 2021, a sharp rise from the 3.1% registered in 2020, "against a backdrop of inflationary pressures from oil price hikes and disruptions in the distribution chain, which have intensified since the first half of last year."

Oxford Economics Africa thus forecasts "that inflation and transport prices will boost the average rate to 7.3% in 2022 from an average of 5.7% in 2021," leading analysts to predict that the central bank will raise the key rate by 75 points this year, 50 of which as early as the second quarter.

Data from the National Statistics Institute (INE) indicate that year-on-year inflation rose to 7.8% during January in Mozambique.

According to the latest reports from the Bank of Mozambique, the main risks that may influence a rise in prices in Mozambique are related to the impacts of covid-19, rising food and liquid fuel prices, along with constraints in the supply chain of goods in the international market.