BM says conflict between Israel and Palestine could affect fuel imports

BM diz que conflito entre Israel e Palestina pode afectar importação de combustíveis

The conflict between Israel and Palestine could harm trade between the country and the Middle East, says a report by the Bank of Mozambique. 

According to the Economic Situation and Inflation Outlook Report by the Bank of Mozambique, quoted by Jornal Notícias, the impact could be felt more in fuel imports to Mozambique from that part of the world.

"The Middle East accounts for around 12 % of Mozambique's total trade with the world, with exports to that region accounting for 3.2% of the country's total exports, while imports from the Middle East account for 19.8% of total imports," reads the Central Bank document quoted by the same newspaper.

The report points out that around 74 % of the fuel the country imports comes from the Middle East.

"It is expected that the flow of goods through the Strait of Hormuz may continue to occur with some constraints, leading to an increase in transaction costs, which could generate inflationary pressure from which Mozambique would not be exempt, due to the considerable volume of fuel that the country imports from that region and given its significant weight in the Consumer Price Index," analyzes the Bank of Mozambique.

Mozambique also buys fertilizers and cement from the Middle East, where imports from that region account for around half of all imports of these goods.

As far as exports are concerned, the biggest exposure lies in aluminum wire, according to the Bank of Mozambique document.

"Among the main goods exported by the country to the Middle East, aluminum wire alone accounts for 24% of exports.

However, it appears that the Middle East is not one of the main export markets for the country's goods and, therefore, the geopolitical crisis in this region has a potentially small direct impact on export revenues," concludes the Central Bank's report.

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