Determinants of Inflation in Mozambique

Author/Editor:

Angel J. Ubide

Publication Date:

October 1, 1997

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Mozambique’s inflation rate was consistently high until 1995, and then plunged in 1996 to 17 percent from 70 percent in 1994. This paper suggests that Mozambique’s inflation pattern is a combination of a “fundamental” trend set by economic policies, seasonal behavior that follows closely that of agriculture, and a collection of irregular events that corresponds mainly to agroclimatic conditions. The empirical results show that the marked tightening of monetary policy in 1996 was the ultimate reason for the control of inflation in 1996, and hence seems to correspond to a change in the “fundamental” trend of inflation that may have long-lasting effects.

Series:

Working Paper No. 1997/145

Subject:

Agricultural production Consumer price indexes Exchange rates Foreign exchange Inflation Monetary base Prices Production Purchasing power parity

English

Publication Date:

October 1, 1997

ISBN/ISSN:

9781451856507/1018-5941

Stock No:

WPIEA1451997

Pages:

36

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