Consultancy Oxford Economics today revised its inflation forecast for Mozambique upwards, now projecting price growth of 5.6% this year, rising further to 8.4% in 2027.
“Recent external and domestic developments do not bode well for Mozambique’s inflation outlook for 2026,” analysts wrote in a commentary on February’s inflation figure, which rose 3.2% year-on-year.
“We had projected the headline rate to remain at 4.8% in 2026, supported by a relatively stable currency and higher interest rates, but the devastating floods in January destroyed large swathes of agricultural land and damaged crucial infrastructure, which is expected to lead to a significant increase in food and transport price inflation, pushing up overall inflation this year,” the analysts argued.
In the note sent to clients, to which Lusa had access, the British consultancy’s Africa department added that it expects a financing agreement with the IMF to require “a sharp and front-loaded currency devaluation, rather than the gradual depreciation” previously forecast.
As a result, they conclude, “the pass-through effects of the rapid currency depreciation will push inflation higher, which is expected to rise from 4.4% in 2025 to 5.6% in 2026, before peaking at 8.4% in 2027 when the full impact of the devaluation is felt.”
The forecast revision follows data published by Mozambique’s National Statistics Institute (INE) for February, showing a 3.2% increase year-on-year and a 0.68% rise compared to January’s inflation figure.
The INE’s February consumer price index shows Mozambique “recorded a price increase of 0.68%” compared to January (1.26%), again driven by the food and non-alcoholic beverages sector, which contributed 0.37 percentage points to the total monthly change. The report highlights monthly price rises in specific products, including charcoal (9.8%), tomatoes (5.5%), mackerel (3.1%), cabbage (8.0%), lettuce (17.6%), cooking oil (1.9%) and cement (1.2%).
From mid-January to early February, roads National 1 and 2 — connecting Maputo northward and southward respectively — were completely cut off due to flooding that affected nearly 725,000 people, disrupting supply chains and driving up prices.
Read more: Mozambique: cash in circulation hits new high in December
The February CPI shows accumulated inflation for the first two months of 2026 at 1.94%, with the year-on-year rate at 3.20%. Prices in Mozambique rose 3.23% across 2025, below the 2024 figure and below government forecasts. Accumulated inflation for 2024 stood at 4.15%, compared to 5.3% in 2023, but well below the peak of nearly 13% reached in July 2022. The government had projected inflation of around 7% for both 2025 and 2026.
