16 May 2018

Botswana: Inflation Rate Ups Slightly in the Month of April

Molepolole — Insurance, the increase of public transport fees and electricity tariffs have pushed the national inflation rate to 3.4 per cent, up by 0.6 per cent on the March rate of 2.8 per cent.

However, the inflation rate remains within the Bank of Botswana's objective range of 3-6 per cent, and is not expected to rise dramatically despite the increase in fuel prices this week.

The Consumer Price Index (CPI) from Statistics Botswana shows that it increased from 104.6 to 106 as three indices registered growth of more than one per cent.

Miscellaneous Goods and Services index moved from 104.5 to 110.1, recording an increase of 5.3 per cent between March and April.

This has mainly been attributed to the rise in the section index of Insurance, which recorded an increase of 11.8 per cent.

The Transport Group index went up from 104.9 to 107.4, recording an increase of 2.3 per cent largely due to the constituent section of Transport Services.

Minibus and taxi fares were increased from P3.50 to P4 and P4 to P5 respectively while long distance bus fare (bitumen road) increased from 21 thebe to 26 thebe per kilometre.

The Housing, Water, Electricity, Gas and other fuels group index increased by 1.5 per cent largely due to a hike in electricity tariffs.

Electricity tariffs were increased by 10 per cent for domestic consumers who use less than 200KWh or more.

The new transport fares and electricity tariffs became effective on 1 April.

The Recreation and Culture index group also moved from 103.4 to 104, attributed to the general increase in some section indices, notably Recreation and Cultural Services.

Information from Statistics Botswana shows that the increase comes after the March rate declined by 0.4 per cent from the February rate of 3.2 per cent.

Fuel prices were increased by 23 thebe per litre for petrol, 45 thebe per litre for diesel while illuminating paraffin has been increased by 38 thebe per litre.

Early this month, Bank of Botswana maintained the Bank Rate at five per cent as the outlook for price stability remained positive.

However, Governor, Mr Moses Pelaelo said the outlook was subject to upside risks, which resulted from growing global economic activity and the potential rise in commodity prices beyond the current forecast.

Further, any substantial unanticipated upward adjustment in administered prices and government levies and taxes also present upside risks to the inflation outlook.

Source : BOPA


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