Recently, the consultancy highlighted that “inflation is likely to face upward pressures in 2025 due to the adverse effects of the recent El Niño, supply chain and distribution constraints caused by disturbances following the elections, and increased capital expenditures.”
Data from the National Institute of Statistics (INE) reveals that prices in Mozambique rose by 0.72% in November compared to the previous month, marking a year-on-year inflation rate of 2.84%. This figure represents an increase from 2.68% in October and 2.45% in September, consolidating a downward monthly trend following four months of deflation between May and August.
At the beginning of December, the Bank of Mozambique warned that prices might continue to rise due to the consequences of post-election tensions, as highlighted in the Economic Situation Report and Inflation Outlook (CEPI). Despite inflation remaining stable in October, the institution forecasts a rise towards the end of 2024, due to supply shortages of goods and services resulting from electoral disputes.
Tense Elections and Protests in Mozambique
The questions arise from the results of the general elections held on October 9, which awarded victory to Daniel Chapo of the Mozambique Liberation Front (Frelimo) with 70.67% of the votes. However, the main opposition leader, Venâncio Mondlane, who secured 20.32%, did not accept the results and called for public protests.
Since October 21, demonstrations have disrupted economic activities in the country, including the main border with South Africa at Ressano Garcia. The governor of the Bank of Mozambique acknowledged that “projections already incorporate these risks and uncertainties,” emphasizing the direct impact of tensions on the market and inflation.
With rising public expenditure and supply constraints, Mozambique’s economic outlook remains uncertain, with additional pressures that could challenge the country’s financial and social stability.
