Mozambique: Oxford Economics forecasts 5.6% inflation in 2026, 8.4% in 2027

The consultancy Oxford Economics has today revised upwards its forecast for price growth in Mozambique, now anticipating inflation of 5.6% this year, which is expected to rise to 8.4% in 2027. “Recent external and domestic developments do not bode well for Mozambique’s inflation outlook in 2026,” analysts wrote in a commentary on February inflation, which rose by 3.2% compared with the same period last year. “We had projected that the overall rate would remain at 4.8% in 2026, due to a relatively stable currency and higher interest rates, but the devastating floods in January destroyed large areas of farmland and damaged crucial infrastructure, which is expected to lead to a significant increase in food and transport prices, raising overall inflation this year,” the analysts argued.

In the note sent to clients, which Lusa had access to, the African division of the British consultancy added that it expects the financing agreement with the International Monetary Fund (IMF) will require “a sharp and early currency devaluation, rather than the gradual devaluation” previously forecast. Thus, they concluded, “the pass-through effects of the rapid currency devaluation will push up inflation, which is expected to rise from 4.4% in 2025 to 5.6% in 2026, before reaching a peak of 8.4% in 2027, when the full impact of the devaluation will be felt.” The updated inflation forecast comes after the Mozambican National Institute of Statistics (INE) presented data for February, showing an increase of 3.2% compared with the same period in 2025, and a rise of 0.68% compared with inflation recorded in January. The Consumer Price Index (CPI) for February from INE indicates that Mozambique “registered a price increase of 0.68%” compared with January (1.26%), again influenced by the food and non-alcoholic beverages sector, which contributed 0.37 percentage points to the total monthly variation.

The report highlights the monthly variation by product, namely the increase in prices of charcoal (9.8%), tomato (5.5%), horse mackerel (3.1%), cabbage (8.0%), lettuce (17.6%), cooking oil (1.9%) and cement (1.2%). “These contributed approximately 0.43 percentage points to the total monthly variation,” notes the CPI, adding that from mid-January until early February, traffic on National Roads 1 and 2, from Maputo north and south respectively, was completely blocked due to the floods — which affected nearly 725,000 people — disrupting supply chains and driving up prices. The February CPI reports that the accumulated inflation for the first two months of 2026 stands at 1.94%, while the year-on-year variation is 3.20%.

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Prices in Mozambique increased by 3.23% in 2025, according to previous INE data, below the 2024 level and government forecasts. Accumulated inflation in 2024, according to previous INE data, was 4.15%, compared with 5.3% in 2023, but still below the peak of almost 13% reached in July 2022.

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