Brian Benza
18 June 2008
After breaking the psychological double digit figures in April, the annual inflation rate gathered more momentum in May, increasing by a further percentage point to 12,1 percent from 11,1 percent, the Central Statistics Office (CSO) has announced.
The May annual inflation rate increase to 12,1 percent, which is an eighth successive rise, means that general prices of goods and services have increased by an average of 12,1 percent between May 2007 and May 2008.
On a month-on-month basis, the inflation rate was at 1.9 percent for May from 2,1 percent in April, meaning that prices of goods and services went up by an average of 1.9 percent in May.
The April (2.1 percent) and (May 1.9 percent) inflation figures are the first and second highest on a monthly basis respectively since January 2005, according to the CSO, showing how prices have been on the rampage in the past two months.
According to a statement by Government Statistician Anna Majelantle, major changes in prices were recorded in the Transport, Food, Clothing and Footwear categories, reflecting the continued rise in food and fuel prices which pushed public transport fares by 20 percent in the same month.
"Six group indices recorded changes of more than 1.0 percent between April and May - Transport (4.6 percent), Food (2.1 percent), Clothing & Footwear (2.0 percent), Housing, Water, Electricity, Gas & Other Fuels (1.6 percent), Restaurants & Hotels (1.4 percent) and Furnishing, Household Equipment and Maintenance (1.1 percent)," the statement said.
"The Transport group index increased by 4.6 percent - from 119.3 to 124.8 between the two periods. This was largely due to an increase in the constituent section indices of Operation of Personal Transport, which rose by 7.6 percent from 123.4 in April to 132.8 in May.
"The rise was mainly due to increases in pump prices for both diesel and petrol by P0.65 and P0.75 per litre respectively, which were effected in May 2008."
The statistician added that the food index group moved from 123.9 percent to 126.4, registering an increase of 2.1 percent between April and May.
"The rise was due to a general increase in the food prices," she said. "All but two section indices recorded increases, notably Oils and Fats (9.5 percent), Bread & Cereals (2.5 percent), Milk & Fish (each 2.4 percent) and Meat - fresh, chilled and frozen (1.4 percent)."
Although other categories of commodities went up, the major driving force of the Consumer Price Index (CPI) has largely been the food and fuel prices, which have skyrocketed since late last year. Food prices have risen by an average of 30 percent since the beginning of the year, while crude oil prices had surged to US$140 by yesterday from around US$100 in January this year.
With no reversal of the food and fuel price hikes in sight, inflationary pressures are likely to continue to mount and countries like Botswana are to be worst affected since it is a net importer of both commodities.
The Bank of Botswana (BoB) has tried to tighten its monetary policy in a bid to stifle consumer demand. Analysts reckon another Bank Rate rise is on the way as inflationary pressures persist.
Speaking at the Botswana Economic Forum (BEF) last week, the Managing Director of Econsult Dr Keith Jefferis said another 50 basis point increase could be looming, although "inflation will come down as quickly as it went up (only) if the price of crude oil stopped rising".
The statement by Majelantle went on to say the inflation rate for towns and cities went up by 1.9 percentage points from 11.0 percent in April to 12.9 percent in May, while the inflation rate for urban villages was 11.8 percent, up from the April rate of 11.0 percent.
The inflation rate in rural villages increased by 1.3 percentage points from 9.8 percent in April to 11.1 percent in May. The National Consumer Price Index for May was 116.6, registering an increase of 1.9 percent on the April index of 114.4. The cities and towns' index moved from 114.1 to 116.5 between April and May, an increase of 2.1 percent. The urban villages' index went up by 1.8 percent - from 114.2 to 116.2 between the two months, while the rural villages' index rose from 115.2 to 116.8, recording an increase of 1.4 percent. On the other hand, the Trimmed Mean Core Inflation rate stood at 11.0 percent in May, an increase of 0.5 of a percentage point from 10.5 percent in April. The Core Inflation rate by exclusion recorded an increase of 0.3 of a percentage point from 8.8 to 9.1 percent between April and May.
Be the first to Write a Comment!
Copyright © 2008 Mmegi/The Reporter. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
