Maputo, Mozambique, 28 July – Average inflation in Mozambique in May totalled 14.7 percent, which was substantially higher than the 9.5 percent target set by the government for this year, Mozambican newspaper Notícias reported.

The newspaper cited specialists as saying that it was unlikely that teh government target would be achieved, fundamentally because the fourth quarter of the year in the past had been decisive in the overall price rises in the country.

However, the Bank of Mozambique remains optimistic about achieving that target and Waldemar de Sousa, a board member responsible for Economic and Foreign Studies, said that the central bank continued to watch the market and believed it was still possible to achieve the government target.

According to Sousa, average inflation, despite currently being at two digits, had showed evidence of a slowdown after April.

Figures presented by the central bank show that in the first quarter overall prices had fallen by 1.70 percentage points year-on-year, which reflects the impact of average accumulated appreciation of the metical against the South African rand of 10 percent, following average depreciation of 5.05 percent in the first quarter of 2010, which had slowed inflation of products imported from South Africa.

Another factor was the greater availability of fresh products in the city of Maputo, which in the first few months interrupted the cycle of high prices seen in the last quarter of 2010, as well as favourable weather, unlike in the same quarter of the previous two year.

In another development, the Bank said that Mozambique’s Gross Domestic Product (GDP) had seen positive growth in the first quarter of the year of 8.4 percent, compared to 6.6 percent in the final quarter of 2010 and 8.7 percent in the same period of last year.

In its Economic and Social Plan for 2011, the government projects GDP growth of 7.2 percent. (macauhub)