Good afternoon. Mozambique’s latest inflation numbers show that the pressure on prices is not being felt evenly across the country. The headline rate points to a national problem, but the geography of inflation reveals how the cost shock is moving through Mozambique’s transport networks and hitting provinces far harder than the capital.
The May figures are already alarming. Prices rose 2.32% in a single month, pushing annual inflation to 7.22%. That is a sharp break from last year, when May recorded deflation and accumulated inflation for the first five months of the year was just 1.28%. The risk of double-digit inflation is now real.
The cause is also clear. Transport alone contributed 1.80 percentage points to the monthly increase, compared with 0.32 percentage points from food and non-alcoholic beverages. This was not a localised rise in one agricultural product, but a shock to an input that enters almost every final price, directly or indirectly: fuel.
The full Daily Briefing continues below for Pro subscribers. Subscribers to the Zitamar News tier can read the top half, including the full leader article, here.
Maputo recorded the lowest inflation of the eight cities covered by INE’s release. Prices in the capital rose by 1.36% in May, compared with 3.62% in Nampula and 4.26% in Quelimane. In Tete, annual inflation is now close to 12%, while in Maputo it remains below 4%.
In one sense, Maputo ought to be suffering the greatest inflationary pressure. The public sector wage bill is estimated to have risen 45% with the implementation of the unitary salary scale (TSU), and much of the state wage bill is concentrated in the capital.
But Maputo has characteristics that protect it better from inflation than much of the country. It has greater commercial density, more competition, better integration with import supply chains, and easier access to South Africa. That does not mean Maputo is immune, but it has more ways to absorb a shock before it reaches the consumer.
