Inflation in Mozambique could fall this year, reaching an average of 4.5%, according to analysis by the consultancy Oxford Economics. This forecast indicates a temporary decrease, with a rise to 7% expected in 2025, influenced by the large natural gas exploration and production projects.
This increase in inflation will be driven by the construction of TotalEnergies' liquefied natural gas project, which will start in the second half of this year. The project will require a substantial amount of financial resources, as well as goods and services, placing additional pressure on local supply chains. The provinces in northern Mozambique, still recovering from conflict, will also need considerable oversight and investment, contributing to this economic pressure.
The Oxford Economics analysts also warned of additional risks that could cause an even larger rise in inflation. Among them, the continuing conflict between Hamas and Israel stands out, which could result in significant increases in oil prices. In addition, the El Niño climate phenomenon could reduce rainfall during the planting season, resulting in higher food prices in Mozambique.
In the latest March figures, Mozambique's National Statistics Institute (INE) reported annual inflation of 3%, down on the same month of the previous year, marking the current downward trend, which could change in the coming years because of the factors mentioned.
