Mozambique metical faces projected 30% devaluation in 2027

Economists are warning of significant economic risks in Mozambique following a projection by Oxford Economics that the metical could devalue by approximately 30% in early 2027. This potential devaluation is linked to a possible financial adjustment agreement with the International Monetary Fund (IMF) aimed at addressing deteriorating public finances and foreign currency shortages.

Experts Constantino Marrengula and Teresa Boene note that such a correction would immediately increase the cost of imported goods in local currency. Because Mozambique is heavily dependent on imports for raw materials, equipment, and consumer goods, these higher costs are expected to be passed on to consumers. This trend could drive inflation and reduce the purchasing power of households, particularly low-income families who spend a large portion of their budgets on food, fuel, and transport.