Mozambique economy bears brunt of terror, global headwinds

Cabo Delgado, Mozambique

from ARMANDO DOMINGOS in Maputo, Mozambique
MAPUTO, (CAJ News) THE Mozambican economy is feeling the pinch amid a combination of high food and fuel prices globally and insecurity north of the country.

These have placed upward pressure on local prices while the Metical currency has weakened 15 percent since mid-April 2021.

This has culminated in the rise of inflation.

Annual inflation in June rose marginally to 5,52 percent from 5,49 percent the previous month.

Meanwhile, in its May sitting the Bank of Mozambique noted that insecurity in the Cabo Delgado, alongside a volatile currency, were among key economic risks.

Islamist sects are executing the conflict in the resources-rich region.

The 16-member Southern African Development Community (SADC) has approved the deployment of joint military force in Mozambique.

Rand Merchant Bank (RMB) reaffirmed its projections that inflation would remain within the range of 4 percent to 6 percent this year, “as aggregate demand is likely to stay subdued, implying flat interest rates for the remainder of the year.”

The International Monetary Fund (IMF) has forecast the economy to grow by 2,1 percent in 2021.

– CAJ News

 

 

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