Consumer Price Index (CPI) data published by the national data bureau – Statistics Botswana (SB) on Friday shows that the pace of increase in prices during the month of June 2022 reached the highest level since January 2009.
The state-owned data agency says annual inflation rate in Botswana climbed to 12.7 percent up from 11.9 percent recorded in May. The increases in prices were mainly reflected through transport which rose by 8.1 percent due to rise in retail pump prices of fuel approved by the Botswana Energy Regulatory Authority (BERA) in late June 2022. Other indexes that registered a significant increase are Food & Non-Alcoholic Beverages (1.4 percent), Housing, Water, Electricity, Gas & Other Fuels (1.1 percent) and Miscellaneous Goods & Services (0.9 percent).
The SB data further shows that the all-Tradeables inflation rate was 16.8 percent in June, registering an increase of 0.8 of a percentage point from the May rate of 16.0 percent. The Domestic Tradeables inflation rate showed a rise of 2.7 percentage points, from 4.6 percent in May to 7.3 percent in June. The Non-Tradeables inflation went up by 1.0 percentage point, from 6.1 percent in May to 7.1 percent in June 2022, while the Imported Tradeables inflation rate remained unchanged at 20.3 percent over the two periods.
The run-away inflation….
With recent increase in fuel prices by the Botswana Energy Regulatory Authority, experts have cautioned that efforts by the central bank to thwart the raging cost of living might prove futile. The domestic inflation is now forecast to remain above the central bank’s 3 – 6 percent objective range in the near term but is expected to fall from the third quarter of 2023 and revert to the objective range during that quarter to reach 6.0 percent.
The central bankers have for several months now cautioned that risks to the inflation outlook in Botswana are skewed to the upside. The risks, according to the Bank of Botswana economists include the potential increase in international commodity prices beyond current forecasts; persistence of supply and logistical constraints due to lags in production.
Last month local assets management firm, Kgori Capital also revised its inflation expectations and now expect domestic inflation to average 11.3 percent in 2022. The firm’s Portfolio Manager – Kwabena Antwi says inflation will fall within the central bank’s objective range in the last quarter of 2023.