02 May 2016

Bank of Botswana Monetary Policy Committee has maintained the Bank Rate at 6 per cent as the global and local economic growth prospects remain subdued.

The central bank states that Botswana’s economic growth is estimated to have contracted by 0.3 per cent in 2015 compared to the 3.2 per cent growth in 2014, reflecting a decline of 19.7 per cent in mining production. Non-mining output , according to a press release from the bank, increased by 3.5 per cent.

Inflation remained unchanged at 3 per cent between February and March this year.

Bank of Botswana states that modest domestic demand and subdued foreign price developments contribute to the positive inflation outlook in the medium term.

It is said the outlook is subject to downside risks emanating from sluggish global economic activity and the resultant weakening commodity prices.

It could however be affected by any unanticipated large increase in administered prices and government levies as well as international oil and food prices beyond current forecasts.

The Bank states that the current state of the economy, domestic and external economic outlook and the inflation forecast suggest that the prevailing monetary policy stance is consistent with maintaining inflation within the Bank’s medium-term objective range of 3 – 6 per cent. The 6 per cent Bank rate has been maintained since August 6, 2015 when it was reduced by half a percent. ENDS