Thursday, September 24, 2020

Inflation rate rises in May on higher energy costs

Botswana’s headline inflation went up slightly for a second consecutive month in May as calculations from the 30 percent energy price hikes filtered in.

Central Statistics Office (CSO) said on their monthly update that in May 2010, national year-on-year inflation rate stood at 7.8 percent, up by 0.7 of a percentage point from 7.1 percent in April 2010.

“Three group indices recorded changes of at least 1.0 percent between April and May ÔÇô Housing, Water & Electricity (3.7 percent), Alcohol & Tobacco (1.4 percent) and Restaurants & Hotels (1.1 percent),” said the CSO.

Earlier in the year, government and Botswana Power Corporation (BPC) agreed to an increase in electricity tariffs as Eskom had done the same.

Botswana imports bulk (over 70 percent) of its energy requirements from South Africa.

Recently, power tariffs were increased by 30 percent through a government’s interventions as Botswana Power Corporation had proposed 55 percent, it has been revealed.

“This was mainly due to the rise in the constituent section indices of Electricity, Gas & Other Fuels (17.5 percent) and Materials for Maintenance & Repair of Dwellings (1.0 percent),” added the CSO.

“The rise in the Electricity, Gas & Other Fuels section index was largely due to the hike in the electricity tariffs for domestic consumers who consumed less than 200 kWh and more than 200 kWh by 15 and 30 percent respectively, which were effected on the 1st May 2010.”

The CSO added that the towns and cities inflation rate went up by 0.8 of a percentage point, from 7.9 percent in April to 8.7 percent in May while the urban villages’ inflation rate increased from 6.3 percent in April to 7.2 percent in May, an increase of 0.9 of a percentage point.

The rural villages’ inflation rate was 6.9 percent in May 2010, up by 0.3 of a percentage point on the April rate of 6.6 percent.

The May national Consumer Price Index was 136.3, recording an increase of 1.0 percent on the April index of 135.0.

The urban villages’ index rose by 1.0 percent, from 134.0 to 135.4 between the two months. The cities & towns’ index moved from 133.5 to 134.8 between April and May 2010, an increase of 1.0 percent.

The rural villages’ index rose by 0.9 percent, from 140.4 in April to 141.6 in May.

This is second month that the numbers rose after inflation jumped to 7.1 percent in April from 6.0 percent in March after the Value Added Tax (VAT) were entered into the April calculations.

Botswana VAT was hiked by 2 percent from 10 to 12 percent, although it is still lower in the region.

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