Africa-Press – Botswana. The national inflation environment continues to be favourable, registering 3.0 per cent in May, down by 0.1 percentage point from the April inflation rate of 3.1 percent.
Last week, Bank of Botswana reduced the Bank Rate by 25 basis points from 2.4 to 2.15 per cent as the central bank remained confident that the inflation rate would remain within its objective range of three to six per cent in the medium-term.
According to the Consumer Price Index (CPI) published by Statistics Botswana, prices of alcoholic beverages and tobacco registered slight growth, 1.4 and 0.2 per cent respectively, pushing the Alcoholic Beverages and Tobacco group index by 1.2 per cent from 134.8 in April to 136.4 in May.
Statistics Botswana further shows that the Transport group index registered an increase of 0.6 per cent largely due to a rise in the constituent section index of Purchase of Vehicles.
The Clothing & Footwear group index rose by 0.5 per cent, from 121.4 in April 2024 to 122.0 in May 2024 attributed to the rise in the constituent section index of Cleaning, Repair & Hire (2.9 percent) and Clothing (0.4 percent).
Bank of Botswana’s Monetary Policy Committee (MPC) last week reduced the Bank Rate by 25 basis points, from 2.4 percent to 2.15 percent as inflation is expected to remain within the objective range (3-6 percent) in the medium-term.
Further, the central bank states that the economy is expected to operate below full capacity in the short-term and therefore not generate demand-driven inflationary pressures.
The MPC states that the inflation is forecast to average 3.6 percent in 2024 and 4.5 percent in 2025. However, it warns that it could increase if international commodity prices increase beyond current forecasts, supply and logistical constraints persists and geo-economic fragmentation escalates.
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