Inflation in Mozambique in December, based on the consumer price indices of the three largest cities — Maputo, Nampula and Beira — was 3.47 per cent, according to the latest data published by the National Statistics Institute (INE).

This pushed the final inflation figure for 2016 to 25.27 per cent, the highest annual inflation rate for well over a decade, but still lower than what had been feared a few months ago.

In October, the Governor of the Bank of Mozambique, Rogerio Zandamela, had warned that by the end of the year, inflation could reach more than 30 per cent. However, harsh monetary policies imposed by the central bank, notably a dramatic increase in the benchmark interest rates, appear to have led to a recovery of the national currency, the metical, and to lower inflation than expected.

As usual, food and drink were responsible for most of the December price increases. Key increases were in the prices of tomatoes (47.7 per cent), coconuts (22.6 per cent), groundnuts (10.2 per cent), fresh or frozen fish (4.9 per cent), maize flour (3.6 per cent), and butter beans (5.5 per cent).

In 2016, prices increased every month, except May, when these was a slight price fall (minus 0.22 per cent). This is unlike the regular pattern of previous years, when prices rose for the first three or four months of the year, then fell in the middle of the year, as the harvest came in, and then rose again at the end of the year and the festive season.

The three main cities had sharply different inflation rates in December. The highest inflation rate of 6.37 per cent was in Beira, followed by Maputo (2.92 per cent) and Nampula (2.84 per cent).