Analysis of the Macroeconomic Determinants of Inflation in Mozambique (1998-2024)
Keywords:
Economic growth, inflation, ordinary least squares methods, interest rates, exchange ratesAbstract
The study analyzed the macroeconomic determinants of inflation in Mozambique from 1998 to 2024. The econometric technique of ordinary least squares (OLS) methods was used with quarterly data extracted from the World Bank. In this method, the dependent variable is inflation and the independent variables are the GDP growth rate, interest rates, consumption, investment and exchange rates. Among the various results, it was only found that the variables such as interest rates, exchange rates and consumption determine inflation because they are all statistically significant at the 1% level. The results of this econometric model indicate that a 1% increase in interest rates, exchange rates and consumption increase inflation by an average of 52.90, 7.85 and 15.73 percentage points respectively. This result is allied to the Bank of Mozambique's concern to combat inflation through interest rate policy, sacrificing other variables such as investment to increase GDP.
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