Inflation to remain high- Bob

The Monetary Policy Committee ( MPC) of Bank of Botswana projects that inflation will remain above the objective range into the medium term but trend downwards from the fourth quarter of 2022 and fall within the objective range from the third quarter of 2024. Inflation decreased from 14.6 percent in August 2022 to 13.8 percent in September 2022, remaining above the Bank’s medium- term objective range of 3 – 6 percent. The fall in inflation is partly due to the impact of the downward adjustment of domestic fuel prices in September 2022. “The projected decrease in inflation in the medium term is due to the dissipating impact of the earlier increases in administered prices, subdued domestic demand, current monetary policy posture, expected decrease in trading partner countries’ inflation and international commodity prices,” said the central bank.

However the MPC highlighted that there is a significant risk that inflation could remain elevated owing to factors that include the potential increase in international commodity prices beyond current forecasts, persistence of supply and logistical constraints to production, the adverse economic and price effects of the ongoing RussiaUkraine war, the uncertain COVID- 19 profile, and the tension between China and Taiwan.