Saturday, July 11, 2020

Consumer inflation slows down in April 2019

Headline inflation decreased to 2.5 percent during the month of April from 3.3 percent in March 2019, latest figures released by the country statistics agency ÔÇô Statistics Botswana shows.

The data shows that the national Consumer Price Index moved to 101.2 in April 2019, registering a rise of 0.6 percent from 100.6, which was recorded in March 2019. The Cities & Towns advanced from 100.6 to 101.2 recording an increase of 0.6 percent. The Urban Villages’ Index realised an increase of 0.6 percent, moving from 100.6 in March to 101.3 in April 2019. The Rural Villages index registered an increase of 0.5 percent, moving from 100.3 to 100.8 over the two periods.

A few weeks ago the  central bank revised its February 2019 monetary policy committee (MPC)’s inflation forecast – rising it slightly following new information pertaining to the country’s economy. The central bank now expects inflation to be slightly higher in the short to medium term, but will remain within the bank’s 3 ÔÇô 6 percent objective range.

The rise in inflation in the short term mainly reflects upward adjustments of alcoholic beverages in the second quarter of 2019, following Kgalagadi Breweries Limited (KBL)’s price review of their entire beer portfolio, said BoB in the report.

Moreover, the central bank says after its February inflation assessment, food prices were later revised upwards in the entire forecast period. International food prices are projected to increase in the short to medium term due to rising shipping costs and adverse climatic shocks in the Southern African region.

The central bank says the slight increase in inflation was mostly accounted for by a faster increase in prices for the operation of personal transport and transport services. However, this did not come as a surprise as BoB had forecasted the same inflationary growth rate for the quarter.

“The forecast had taken into account the adjustment in private school fees, the relative strength of the Pula in the context of the positive rate of crawl implemented in January 2019 and higher international commodity prices,” the bank said in the report.

On the other hand, core inflation ÔÇô which excludes volatile prices such as fuel and food ÔÇô averaged 2.7 percent in the first three months of the year, slightly lower than 2.9 percent averaged in the first quarter of 2018.

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Sunday Standard July 5 – 11

Digital copy of Sunday Standard issue of July 5 - 11, 2020.