Since the early 1990s, Mozambique experienced a sustained economic growth. As a result, the
country reduced both the consumption and multidimensional poverty between 1996/97 and
2014/15. Starting during the second half of 2015, the poverty reduction trend reversed due to a
deep economic crisis. It hit the country, due to multiple factors, including a debt crisis, a series of
weather shocks, violent attacks in the northern province of Cabo Delgado, and the Covid-19.
In this paper we aim to analyse and link together the exchange rate and price trends, and the shocks experienced by the country between 2014/15 and 2019/20, in an attempt to examine and uncover
how they influenced poverty.
We find, due to the above shocks, GDP per capita growth experienced a first slowdown in 2015 and a second one in 2016-17. During the same period, the official exchange rate between the national currency, the Mozambican Metical (MZN), and the US Dollar (USD) increased significantly . This led to an increase in the price of imported goods, which in turn caused a significant increase in the consumer price index (CPI) at national level.
Available at: https://doi.org/10.55158/DEEPWP13