Inflation inches up marginally
Mbongeni Mguni | Wednesday July 16, 2025 21:48
Figures released by Statistics Botswana this week, indicate that food and non-alcoholic beverages contributed 0.8 percentage points to the annual inflation rate in June, the same as the miscellaneous goods and services category. Alcoholic beverages and tobacco contributed 0.3 percentage points to annual inflation in June, whilst transport contributed a negative 0.5 percentage points.
The latter is due to the absence of a fuel price increase in June, when compared to a year ago. Indices tracking individual items within the food category indicate that prices of coffee, tea and cocoa rose the most in the 12 months to June, increasing by 13.7 percent.
Average fruit prices rose by 11 percent over the same period, whilst sugar, jam, honey, chocolate and confectionery were up 7.3 percent. Oils and fats continue to enjoy the lowest pace of price increases, being measured at just 0.1 percent in the 12 months to June. Oils and fats are one of the items exempted from Value Added Tax under the cost of living regulations passed by government in February 2023.
Whilst the Bank of Botswana expects inflation to average 2.7 percent this year, below the medium-term inflation objective range of three to six percent which is considered stable and conducive to growth.
Analysts have, however, said inflation could rise beyond the central bank’s expectations as some businesses make opportunistic increases to prices based on the misreading of a recent pula exchange rate adjustment decision.