18 Apr 2018

The national inflation rate registered a decline of 0.4 per cent between February and March this year, and analysts predict the gravy train has come to an end following an increase of administered prices.

Information from Statistics Botswana shows that inflation decreased from the February rate of 3.2 per cent to 2.8 per cent.

The rural villages inflation declined to 2.3 per cent from 2.7 per cent while the cities and towns inflation also went down to 3.3 per cent from 3.6 per cent.

Urban inflation also decreased from 2.9 per cent to 2.6 per cent between the two months.

Most of the group indices moved at a stable pace, recording changes of less than one per cent.

Transport index group decreased by 0.1 per cent from 15 to 14.9 in March.

This was attributed to a drop in the constituent section index of Purchase of Vehicles, which went down by 0.5 per cent.

Economic analysts predict a rise in inflation driven primarily by the transport index following an increase of public transport fares by 20 per cent.

The index group accounts for 20.65 per cent of the Consumer Price Index basket, hence it has a significant impact on the overall inflation.

Meanwhile, the Furnishing, Household Equipment and Routine Maintenance group index went up from 103.7 to 104.4, recording a rise of 0.6 per cent due to increases in Goods and Services for household maintenance. The Recreation and Culture group went from 102.9 to 103.4 due to some increase in section indexes, particularly Audio Visual, Photographic and Information Processing Equipment.

The Housing, Water, Electricity, Gas and Other Fuels index group increased by 0.3 per cent mainly attributable to the rise in rental and maintenance of dwellings.

It is said the group index will also register an increase in the April inflation following an increase of electricity tariffs by 10 per cent beginning of this month.

The national inflation rate has been within the 3-6 per cent Bank of Botswana rate, which has seen the Bank Rate maintained at 5 per cent.

Bank of Botswana in a monetary policy statement released in February stated, “Any anticipated upward adjustment in administered prices and government levies and taxes also presents upside risks to the inflation outlook”. ENDS