Africa-Press – Botswana. The cost of goods and services in Botswana dropped to a 25-month low of 4.6 percent in June 2023, remaining within the Bank of Botswana’s 3 -6 percent objective range, data published.
The SB’s national Consumer Price Index (CPI) realised a rise of 0.2 percent, from 130.2 in May 2023 to 130.5 in June 2023. The SB data shows that the group indices were generally moving at a stable pace between May and June 2023, recording changes of less than 1.0 percent.
A further breakdown of the CPI data shows that the main drivers to the annual inflation rate in June 2023 were the Food & Non-Alcoholic Beverages (1.7 percent) and Miscellaneous Goods & Services (0.8 percent) indexes.
Following another fall registered in May 2023, Bank of Botswana governor, Moses Pelaelo told journalists that going forward, domestic inflation is expected to remain within the central bank’s objective range into the medium term.
As a result, the Monetary Policy Rate (MoPR) was kept at 2.65 with central bankers saying they do not expect a demand driven inflationary pressure in the short term.
“The projected decrease in inflation is due to, among others, absence of upward adjustment of administered prices, subdued domestic demand, projected appreciation of the Pula against the South African rand and zero rating of a select number of items from value added tax,” Pelaelo said.
The big battle
The fight by the central bank to tame prices has come a long way since last year, when inflation peaked at 14-year highs, reaching 14.6 percent in August 2022.
Since the beginning of the year, the CPI has appeared ready to decline rapidly a few times only for inflation to intensify.
For instance, a cool down in the consumer inflation that was registered in the month of February 2023 was halted during the month of March, as prices across the economy ticked up at a rate of 9.9 percent, registering a rise of 0.8 of a percentage point from February. The annual consumer price inflation had eased to 9.1 percent in February 2023, registering a drop of 0.2 of a percentage point from the January rate of 9.3 percent.
The March inflation rate was largely influenced by a rise in fuel prices following an upward adjustment by the Botswana Energy Regulatory Authority (BERA) in late February 2023.
To date, BERA has adjusted fuel prices twice, – with one downward move made in mid-January which was followed by an upward adjustment on the 28th of February. The February 28 review saw unleaded petrol 93 going up by 95 thebe per litre while that for unleaded petrol 95 rose by 92 thebe, retail pump price of diesel 50ppm increased by 56 thebe per litre while retail pump price of illuminating paraffin increased by 72 thebe per litre. In April inflation clocked 7.9 percent, down from a reading of 9.9 percent in March 2023 and as a result registering a 2.0 percentage points drop before reaching 5.7 and 4.6 percent in May and June respectively.
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