Sunday, May 29, 2022

Headline inflation slows down for third consecutive month

Botswana’s national inflation went down slightly last month in a period where most group indexes remained stable registering marginal movements.

According to data released on Friday by Statistics Botswana, in March 2012, the national year-on-year inflation rate stood at 8.0 percent, down by 0.2 of a percentage point from 8.2 percent in February 2012.

Market analysts, however, believe the downward trend is not surprising as it is largely expected.

This is the third successive month that inflation has declined and for Q1, inflation has averaged 8.3 percent the same average during Q1 2011, but an improvement from Q4 2011 average of 9.1 percent.

Motswedi Securities said in a brief note the decline in inflation is broadly in line with expectations as increases in administered prices, energy costs and fuel prices effected last year falls out of the annual comparison.

At 8.0 percent y/y, inflation has fallen to an 8 month low, raising hopes that the BoB inflation target of between 3-6 percent might be achieved during H2 2012.

“The threat to this inflation outlook includes rising fuel and food prices on the international market and possible increases in administered prices,” said Motswedi Securities in a note on Monday.

“Against this background, the BoB Monetary Committee is widely expected to leave the Bank Rate unchanged at its next meeting in April, with possible downwards reviews during H2 2012 if inflation falls towards the BoB target,” it added.

Two group indices recorded changes of at least 1.0 percent between February and March ÔÇôAlcoholic Beverages, Tobacco & Narcotics (1.2 percent) and Restaurants & Hotels (1.1 percent).

Alcoholic Beverages, Tobacco & Narcotics group index rose by 1.2 percent from 193.6 to 196.0 between February and March. This was attributed to a rise in the constituent section indices of Alcoholic Beverages (1.3 percent) and Tobacco (1.0 percent).

The Restaurants & Hotels group index recorded an increase of 1.1 percent from 187.5 in February to 189.5 in March.

“This was largely due to a rise in the constituent section index of Restaurants, Cafes and the Like (1.1 percent),” Statistics Botswana said.

Food & Non Alcoholic Beverages group index went up by 0.7 percent, from 173.3 in February to 174.6 in March.

“The rise was due to a general increase in the food prices. All section index recorded increases, notably; Mineral Waters, Soft Drinks, Fruits & Veg. Juices (1.6 percent), Bread & Cereals (1.3 percent) and Fruits (0.9 percent).”

The urban villages’ inflation rate went down from 8.6 percent in February to 8.3 percent in March, a decrease of 0.3 of a percentage point.

The towns and cities’ inflation rate registered a drop of 0.2 of a percentage point, from 8.0 percent in February to 7.8 percent in March.

The rural villages’ inflation rate stood at 8.2 percent in March, down by 0.1 of a percentage point on the February rate of 8.3 percent.

The March national Consumer Price Index was 155.4, registering an increase of 0.5 percent on the February index of 154.7.

The Rural Villages’ index recorded an increase of 0.7 percent from 157.6 to 158.6 between the two months.

The Urban Villages’ index moved from 154.4 to 155.1, recording an increase of 0.5 percent, while the Cities and Towns’ index went up from 153.7 to 154.3, registering an increase of 0.4 percent.

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