Inflation jumps to 3.2%

Inflation in March rose to 3.2 percent from 2.4 percent in February, helped up by increases in the prices of transport, food as well as tobacco. Figures from Statistics Botswana released this week show that the Transport index sub-index of the Consumer Price Index rose by 2.8 percent in March, while the Food and Non-Alcoholic Beverages sub-index rose by 0.5% over the same period. The Alcoholic Beverages & Tobacco group sub-index rose by 0.5% due largely to higher tobacco prices. Statistics Botswana researchers said the transport sub-index movements were due to the increase of pump prices effected on March 1. Stockbrokers Botswana analysts said the upward pressures on inflation in March were partly offset by inflation remaining stable with respect to sub-indices such as Clothing and Footwear, Housing, Water, Electricity, Gas and Other Fuels, Communication, Recreation and Culture and Education. By increasing to 3.2 percent, inflation is now back within the Bank of Botswana’s three to six percent medium-term target range for the first time since September 2019. In between that period, inflation trended below the two percent mark, reaching a record low of 0.9% in June and July 2020. The central bank says inflation will rise to the upper bound of the medium-term target this year driven by the Value Added Tax increase, new sugar tax, increased fuel levy, higher electricity tariffs, revised Botswana Housing Tariffs and expected higher pump prices.