Inflation Down By 1.3% On Fuel Costs

WANETSHA MOSINYI
Staff Writer | Monday January 19, 2009 00:00

According to the December 2008 Consumer Price Index (CPI) released by the Central Statistics Office (CSO) on Thursday, the transport index dropped following a big cut in the pump prices for petrol and diesel in December.

'The drop in Operation of Personal Transport section index was attributed to the fall in retail pump prices for both diesel and petrol by P1.00 per litre,' government statistician Annah Majelantle says in the report.

The slower inflation follows a leap to 15 percent year-on-year in November when the government imposed a 30 percent levy on alcohol beverages.

The Transport group index went down by 6.2 percent from 121.4 to 113.8 between November and December.  This was largely because of the decrease in the constituent section index of Operation of Personal Transport, which went down by 11.1 percent from 118.9 in November to 105.7 last month.

The rural villages' inflation rate remained the same at 16.7 percent in December as in November, whilst the urban villages' inflation rate went down by 1.0 percentage point from 14.3 percent to 13.3 percent.

The town's and cities inflation rate fell by 1.9 percentage points from 14.8 percent in November to 12.9 percent in December.    The December national Consumer Price Index was at 123.7, a decrease of 0.7 percent as compared to 124.5 in November. The rural villages' index increased by 0.2 percent - from 128.2 to 128.5 between the two periods.

A drop of 1.1 percent was recorded in the towns' and cities index as it moved from 123.3 to 121.9 between November and December.  The urban villages' index stood at 123.4 in December, a decrease of 0.6 percent on the November Index.     Four group indices recorded changes of more than 1.0 percent between November and December -Alcoholic Beverages, Tobacco and Narcotics (1.1 percent), Clothing & Footwear (1.1 percent) and Restaurants and Hotels (1.0 percent).

The Domestic Tradeables inflation rate increased by 0.6 of a percentage point, from 25.8to 26.4 percent, whilst the Imported Tradeables inflation rate dropped by 3.1 percentage points between November and December, from 15.0 to 11.9 percent.

Trimmed Mean Core Inflation rate stood at 12.1 percent in December, a drop of 1.5 percentage points on the November rate of 13.6 percent.

Inflation started easing in September after an upward trend spanning nearly a year on the back of high food and fuel costs. The Bank of Botswana (BoB) cut its bank rate by 50 basis points to 15 percent last month, saying it expected inflation to move towards its 3-6 percent target this year.

Analysts believe that the central bank's 3-6 percent inflation target range will be attainable during the last quarter of 2009, as long as food and fuel prices remain at current levels.