Oxford Economics forecasts inflation in Mozambique at 4.8% this year and 8.4% in 2027

The consultancy Oxford Economics predicts that inflation in Mozambique could rise significantly this year to 4.8%, before soaring to 8.4% in 2027, mainly due to the resumption of gas projects. “Inflation will continue to moderate in the first quarter of 2026, with prices controlled by exchange rate stability and high real interest rates,” analysts note. However, “the restart of liquefied natural gas (LNG) projects and some monetary financing of the budget deficit will exert upward pressure on prices this year.” In a commentary on December’s inflation figures, sent to clients and accessed by Lusa today, the consultancy’s Africa department, not taking into account the current flooding and crop losses in Mozambique, also states that “the country’s overvalued currency, limited foreign exchange reserves and IMF pressure are likely to lead the government to gradually devalue the metical in 2026.” This, they add, will cause “average inflation to rise moderately to 4.8% in 2026, accelerating further to an average of 8.4% in 2027, as the effects of currency devaluation become more pronounced.” Prices in Mozambique rose by 3.23% in 2025, according to data from the National Institute of Statistics (INE), half the government’s initial estimate and below the figure recorded the previous year.

The Consumer Price Index (CPI) for December shows that Mozambique “recorded a price increase of around 0.49%” compared to November, once again influenced by the food and non-alcoholic beverages sector, which contributed 0.43 percentage points to the total monthly variation. It adds that during 2025, the country “recorded an increase in the general price level of around 3.23%,” mainly due to the impact on the food and non-alcoholic beverages division and restaurants, hotels, cafés and similar sectors, contributing 1.87 and 0.70 percentage points, respectively. The cumulative inflation for 2024, according to previous INE data, stood at 4.15%, compared with 5.3% in 2023, but below the peak of nearly 13% reached in July 2022. The government had forecast inflation of around 7% for Mozambique in 2025, the same estimate for 2026.