Inflation in Mozambique is expected to stay above 5.3% this year, according to Oxford Economics Africa forecasts.

In a note released this Wednesday, the consulting firm justifies this forecast by pointing to the increase in fuel prices, advancing a possible increase in interest rates by the Bank of Mozambique.

"Inflation averaged 5.3% this year through October, up from 3.1% during the same period last year; our current projection of 5.3% will likely be revised slightly higher due to rising fuel prices and the recent price revision for oil," reads a commentary on Mozambique's inflation developments, which in October rose to 6.4%, the highest level since November 2017.

According to Oxford Economics' commentary, the increase in fuel prices by 7 to 22% in October had an immediate and significant effect on inflation through transportation and household utility costs.

For the Oxford Economics analysts, "these fuel price hikes will keep inflation high and near four-year highs in the coming months, which increases the likelihood that the Bank of Mozambique may raise the benchmark interest rate by 25 or 50 basis points on November 17."