The fuel oil is a basic input to production, so an increase in oil price leads to a rise in production costs that induces firms to lower output. In parallel, oil prices change also effects, indirectly, the consumption, through its positive relation with disposable income. However, despite the relevance of the variation in fuel prices in economy, there are no recent study conducted to analyse the impact of changes in fuel prices on GDP and CPI in Mozambique. This study aims to contribute to filling the information gap by providing the quantification of the impact of fuel prices on GDP and CPI. So, the study aim to determine the impact of changes in FUEL prices on Inflation (Consumer Price Index – CPI) and Economic Growth (Gross Domestic Product – GDP), using quarter data from 2007 to 2020. Descriptive statistics, Unit Root Test, Johansen Cointegration Test and Error Correction Model, Granger Causality Econometric Models, Impulse and Response Function and Variance Decomposition Analysis are used. The results indicate that in Mozambique there are a cointegrating long-run relationship between FUEL prices and CPI and GDP, which suggest that the impact of FUEL prices shocks to CPI and GDP in short-run and long-run path. Also, the results show that changes in GDP and FUEL prices lead to an increase in CPI by 3.0% and 1.3%, respectively, coeteris paribus. The previous quarter’s errors (or deviation from long-run equilibrium) are corrected for with the current quarter at a convergence speed of 3.5% to GDP, and 4.8% to CPI. Granger causality tests also indicate causality between CPI and GDP, and the changes in GDP causes changes in other variables.
| Published in | International Journal of Economics, Finance and Management Sciences (Volume 12, Issue 3) |
| DOI | 10.11648/j.ijefm.20241203.12 |
| Page(s) | 142-160 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2024. Published by Science Publishing Group |
FUEL, Consumer Price Index, Gross Domestic Product, Vector Autoregressive, Vector Error Correction Model
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APA Style
Macia, S., Macuacua, J., Vilanculos, A., Mahaluça, F. (2024). Impact of Changes in Fuel Prices on Inflation and Economic Growth in Mozambique. International Journal of Economics, Finance and Management Sciences, 12(3), 142-160. https://doi.org/10.11648/j.ijefm.20241203.12
ACS Style
Macia, S.; Macuacua, J.; Vilanculos, A.; Mahaluça, F. Impact of Changes in Fuel Prices on Inflation and Economic Growth in Mozambique. Int. J. Econ. Finance Manag. Sci. 2024, 12(3), 142-160. doi: 10.11648/j.ijefm.20241203.12
AMA Style
Macia S, Macuacua J, Vilanculos A, Mahaluça F. Impact of Changes in Fuel Prices on Inflation and Economic Growth in Mozambique. Int J Econ Finance Manag Sci. 2024;12(3):142-160. doi: 10.11648/j.ijefm.20241203.12
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Download@article{10.11648/j.ijefm.20241203.12,
author = {Sandre Macia and Júlio Macuacua and Alfeu Vilanculos and Filipe Mahaluça},
title = {Impact of Changes in Fuel Prices on Inflation and Economic Growth in Mozambique
},
journal = {International Journal of Economics, Finance and Management Sciences},
volume = {12},
number = {3},
pages = {142-160},
doi = {10.11648/j.ijefm.20241203.12},
url = {https://doi.org/10.11648/j.ijefm.20241203.12},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20241203.12},
abstract = {The fuel oil is a basic input to production, so an increase in oil price leads to a rise in production costs that induces firms to lower output. In parallel, oil prices change also effects, indirectly, the consumption, through its positive relation with disposable income. However, despite the relevance of the variation in fuel prices in economy, there are no recent study conducted to analyse the impact of changes in fuel prices on GDP and CPI in Mozambique. This study aims to contribute to filling the information gap by providing the quantification of the impact of fuel prices on GDP and CPI. So, the study aim to determine the impact of changes in FUEL prices on Inflation (Consumer Price Index – CPI) and Economic Growth (Gross Domestic Product – GDP), using quarter data from 2007 to 2020. Descriptive statistics, Unit Root Test, Johansen Cointegration Test and Error Correction Model, Granger Causality Econometric Models, Impulse and Response Function and Variance Decomposition Analysis are used. The results indicate that in Mozambique there are a cointegrating long-run relationship between FUEL prices and CPI and GDP, which suggest that the impact of FUEL prices shocks to CPI and GDP in short-run and long-run path. Also, the results show that changes in GDP and FUEL prices lead to an increase in CPI by 3.0% and 1.3%, respectively, coeteris paribus. The previous quarter’s errors (or deviation from long-run equilibrium) are corrected for with the current quarter at a convergence speed of 3.5% to GDP, and 4.8% to CPI. Granger causality tests also indicate causality between CPI and GDP, and the changes in GDP causes changes in other variables.
},
year = {2024}
}
TY - JOUR T1 - Impact of Changes in Fuel Prices on Inflation and Economic Growth in Mozambique AU - Sandre Macia AU - Júlio Macuacua AU - Alfeu Vilanculos AU - Filipe Mahaluça Y1 - 2024/05/30 PY - 2024 N1 - https://doi.org/10.11648/j.ijefm.20241203.12 DO - 10.11648/j.ijefm.20241203.12 T2 - International Journal of Economics, Finance and Management Sciences JF - International Journal of Economics, Finance and Management Sciences JO - International Journal of Economics, Finance and Management Sciences SP - 142 EP - 160 PB - Science Publishing Group SN - 2326-9561 UR - https://doi.org/10.11648/j.ijefm.20241203.12 AB - The fuel oil is a basic input to production, so an increase in oil price leads to a rise in production costs that induces firms to lower output. In parallel, oil prices change also effects, indirectly, the consumption, through its positive relation with disposable income. However, despite the relevance of the variation in fuel prices in economy, there are no recent study conducted to analyse the impact of changes in fuel prices on GDP and CPI in Mozambique. This study aims to contribute to filling the information gap by providing the quantification of the impact of fuel prices on GDP and CPI. So, the study aim to determine the impact of changes in FUEL prices on Inflation (Consumer Price Index – CPI) and Economic Growth (Gross Domestic Product – GDP), using quarter data from 2007 to 2020. Descriptive statistics, Unit Root Test, Johansen Cointegration Test and Error Correction Model, Granger Causality Econometric Models, Impulse and Response Function and Variance Decomposition Analysis are used. The results indicate that in Mozambique there are a cointegrating long-run relationship between FUEL prices and CPI and GDP, which suggest that the impact of FUEL prices shocks to CPI and GDP in short-run and long-run path. Also, the results show that changes in GDP and FUEL prices lead to an increase in CPI by 3.0% and 1.3%, respectively, coeteris paribus. The previous quarter’s errors (or deviation from long-run equilibrium) are corrected for with the current quarter at a convergence speed of 3.5% to GDP, and 4.8% to CPI. Granger causality tests also indicate causality between CPI and GDP, and the changes in GDP causes changes in other variables. VL - 12 IS - 3 ER -
The Centre of Excellence in Agri-Food Systems and Nutrition (CE-AFSN), Eduardo Mondlane University, Maputo, Mozambique; National Statistics Institute, Directorate of National Accounts and Global Indicators, Maputo, Mozambique; Higher Institute of Accounting and Auditing of Mozambique, Maputo, Mozambique
Higher Institute of Accounting and Auditing of Mozambique, Maputo, Mozambique
Higher Institute of Accounting and Auditing of Mozambique, Maputo, Mozambique; Faculty of Economics, Eduardo Mondlane University, Maputo, Mozambique
Higher Institute of Accounting and Auditing of Mozambique, Maputo, Mozambique; Department of Economics, University Saint Thomas Mozambique, Maputo, Mozambique
