Economy of Mozambique - Low Inflation

Low Inflation

The government's tight control of spending and the money supply, combined with financial sector reform, successfully reduced inflation from 70% in 1994 to less than 5% from 1998-99. Rates spiked in 2000, however, to a rate of 12.7% due to economic disruptions stemming from the devastating floods. Inflation began to increase in the second half of 2001. The value of Mozambique's currency, the Metical, lost nearly 50% of its value against the U.S. dollar since December 2000, although in late 2001 it began to stabilize.