Wednesday, February 21, 2024

BOB to tame inflation within its target range

The Bank of Botswana (BOB) said it expected inflation to remain within its 3-6 percent inflation margin for the remainder of the year. The 0.3 percent decline in June’s inflation rates to 5.8 percent has aligned the national annual inflation rate to Bank of Botswana (BOB)’s objective of a 3-6 percent inflation objective.

Local economists are in agreement with the Central Bank the rates will remain within 3-6 percent margin until the end of 2013. However, they remain attentive of the impact that international prices can cause on inflation.

The rates have continuously decreased four times this year, from inflation being at its highest in March at 7.6 percent to 7.2 percent in April, in May it was at 6.1 percent and eventually 5.8 percent in June. According to the Central Statistics Office (CSO) the decrease is a result of the stable prices of commodities, such as Food and Non-Alcoholic beverages, both of which experienced declines of 2.5 percent and 2.8 percent, respectively.

Earlier this year, BOB published a statement explaining that the 3-6 percent inflation margin approximates the averages inflation for Botswana’s major trading partner countries.

“This level of inflation creates a conducive environment for mobilising savings and investment, and fosters industry competitiveness, both of which contribute to sustainable economic growth, employment creation and higher living standards. Moreover, price stability helps to preserve the purchasing power and value of assets, especially for poorer households, thus contributing to the maintenance of decent living standards and less income inequality,” the bank headed by Linah Mohohlo said.

CSO also compared inflation rates between different regions in Botswana from May to June of 2013.

It said cities and towns went down to 5.5 from 5.9 percent, rural villages’ dropped to 6.6 from 6.9 percent while urban villages’ registered 5.8 from 5.9 percent.

CSO records the June 2013 national Consumer Price Index as 169.1, an increase of 0.2 percent compared to the May’s 168.7.

“The rural villages’ index advanced from 172.5 to 173.3, recording an increase of 0.5 percent. The Urban villages’ index realized a rise of 0.4 percent, from 167.5 to 168.1 between the two months, while the cities and towns’ index moved from 168.0 to 168.1 between May and June, registering an increase of 0.1 percent,” wrote CSO.


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