Botswana’s annual inflation slightly drops

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Inflation
Inflation

Botswana’s annual inflation rate fell in August, the country’s data authority announced.

Statistics Botswana said the annual inflation rate was 8.8 percent in August after registering 8.9 percent in July 2021, a drop of 0.1 of a percentage point.

Statistician General Burton Mguni on Wednesday attributed the development to group indices that were generally moving at a stable pace between July and August 2021, recording changes of less than 1 percent.

Commenting on the development, Kgori Capital analyst Kwabena Antwi indicated that the drop could be an indication of economic stability, following months of a perennial inflation rise.

“We believe inflation has peaked and will grind lower, but remain above the BoB’s (Bank of Botswana) objective range in the coming months,” said Antwi.
The main upside risk to the forecast is transport inflation as more pump price increments are required to address persistent fuel under-recoveries, while the main downside risk is continued lackluster domestic demand, according to Antwi.

Meanwhile, due to the Botswana government’s COVID-19 counter measures, the sale of alcoholic beverages was suspended since June 30 and as a result there were no transactions for the alcoholic beverages in August 2021 that allowed for price measurements.

“In accordance with the International Monetary Fund (IMF) guidelines, the missing prices for Alcoholic beverages were imputed using the observed prices of other sections within the group of alcoholic beverages and tobacco,” said Mguni. Enditem

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