The headline inflation as measured by Consumer Price Index remained unchanged last month as most indices remained flat. However, the numbers will remain higher than the Bank of Botswana objective range of 3- 6 percent for the remainder of the year.
Statistics Botswana said on its monthly CPI update that in March 2011, the national year-on-year inflation rate stood at 8.5 percent, the same rate as in February 2011.
It revealed that most of the constituent indices, such as food & nonÔÇôalcoholic beverages, were stable but the furnishing, household equipment and routine maintenance group index registered an increase of 1.2 percent, from 142.9 in February to 144.6 in March.
“This was a result of a general increase in the prices of the constituent sections of furnishing, household equipment and routine maintenance, notably items constituting section indices of goods and services for household maintenance (1.8 percent), carpets and other floor coverings (1.6 percent) and small tools, miscellaneous accessories (1.1 percent).”
On the other hand, the alcoholic Beverages, Tobacco and Narcotics group index registered an increase of 1.1 percent from 183.9 to 186.0 between the two months.
This was attributed to a rise in the constituent section indices of alcoholic beverages (1.0 percent) and Tobacco (1.9 percent). The rise in the alcoholic beverages section index was due to an average price increase of 6.5 percent in alcoholic drinks, which effected on the 1st March 2011.
This was necessitated by the increase in the prices of raw materials used in the production of alcoholic beverages. The housing, water, electricity, gas and other fuels group index moved from 129.4 in February to 130.9 in March, recording an increase of 1.1 percent. This was largely attributed to a rise in the constituent section index of Rent paid by tenants, which went up by 1.8 percent, following the quarterly survey on private rentals.
The materials for maintenance and repair of dwellings and electricity gas and other fuels section indices recorded increases of 0.8 and 0.4 percent, respectively, between February and March.
The food and non alcoholic beverages group index moved from 159.1 to 160.5, registering an increase of 0.9 percent between February and March 2011. The rise was due to a general increase in the food prices.
All section index recorded increases, notably, sugar, jam, honey, chocolate and confectionary (3.6 percent), oils and fats (3.4 percent), fruits (3.3 percent), coffee, tea and cocoa (1.5 percent), and food not elsewhere classified (1.1 percent).
The recreation and culture group index recorded an increase of 0.8 percent from 117.6 in February to 118.5 in March.
“This was largely due to a rise in the constituent section index of newspapers, books and stationary (3.5 percent) and other recreational Items and equipment (2.7 percent)”.
Motswedi Securities said despite the inflation stabilising in March, they project it will end the year at 7.9 percent y/y and fell to 6.8 percent y/y in 2012.
“We expect inflation to remain high above the Bank of Botswana (BoB) 3-6 percent objective range throughout 2011 due to higher forecasts for food and fuel prices as well as the impact of the increase in the alcohol levy, private school fees and possible increases in utility tariffs”
Statistics Botswana noted the cities and towns’ inflation rate registered a drop of 0.2 of a percentage point, from 9.5 percent in February to 9.3 percent in March 2011.
The Urban Villages’ inflation rate moved from 8.4 percent in February to 8.7 percent in March, an increase of 0.3 of a percentage point, while the rural villages’ inflation rate recorded a decrease of 0.6 of a percentage point, moving from 6.6 to 6.0 percent between February and March 2011.