The Oxford Economics Africa consultancy has revised its inflation forecast for Mozambique to 7.3% this year, after prices rose 7.8% in January, the highest since 2017.

"A annual inflation rate rose further in January, reaching the highest level since October 2017, mainly due to the recent adjustment in fuel prices and continued food inflation," reads the commentary on January's price rise.

In the commentary sent to clients, and which is quoted by Lusa, Oxford Economics Africa writes that "consumer price index inflation increased by 1.1 points to 7.8% in January, when in December it had a year-on-year increase of 6.7%.

Inflation registered an increase of 5.7% in 2021, a sharp rise from the 3.1% registered in 2020, "against a background 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.

Year-on-year inflation rose to 7.8% during the month of January in Mozambique, according to data from the National Statistics Institute (INE), released on Wednesday.

The categories of food and non-alcoholic beverages and transport were those that contributed the most to the rise in prices in January compared to the same period in 2021, according to the latest bulletin of the Consumer Price Index (CPI).

The latest report from the Bank of Mozambique, states that 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.

Source: Lusa