Consumer inflation during the month of October recorded a slight downward movement of 0.2 percentage point over the September rate, Consumer Price Index (CPI) data released on Friday by Statistics Botswana shows.
The government statistics agency data shows that the national inflation rate for October stood at 4.3 percent as compared to 4.5 percent recorded during the previous month of September.
Principal Statistician, Ketso Makhumalo, said Friday that the continued drop in the domestic inflation rate has been attributed to slow movement of prices realised in the main components of Transport and Food indices.
The SB data shows that the respective groups dropped by 2.7 and 1.9 percentage points respectively.
A further analysis of the groups shows that the transport sector inflation rate declined to 1.6 percent during the month under review opposed to the 4.3 percent realised in the same month last year.
“It should be noted that increase in fuel prices has an impact in the CPI basket. The last increase in fuel prices was in November 2012. This has helped to suppress the overall inflation rate,” a statement accompanying the release of the October CPI figures reads in part.
Meanwhile the data further indicate that Botswana’s domestic tradable inflation rate was 5.0 percent while imported tradable was 3.3 percent. Makhumalo said on Friday that the CPI figures are vital as they are used to determine amongst other key economic benchmarks such as exchange rates.
Domestic inflation fell within the Bank of Botswana’s objective range of 3-6 percent in 2013 in the context of modest demand and the absence of upward pressures from changes in administered prices.
Available data shows that the average national inflation rate decreased from 8.5 percent in 2011 to 7.5 percent by the end of 2012. Last year further steady progress was recorded, with inflation dropping to 4.8 percent as of October 2013.
In January this year, the annual rate of the domestic inflation slightly went up by 0.3 of a percentage point from 4.1 percent in December last year to 4.4 percent.
The Bank note on its Monetary Policy Statement for the year 2014 that its formulation and implementation of monetary policy will focus on entrenching expectations of low and sustainable inflation in the medium term, through timely responses to price developments, while ensuring that credit and other market developments are consistent with lasting stability of the financial system.