Inflation unchanged at 7.3 percent

Staff Writer | Friday August 17, 2012 00:00

In a statement, SB says group indices were stable between June and July, recording movements of less than 0.5 percent except for the transport group index that recorded an increase of 0.7 percent. 'The Transport group index recorded an increase of 0.7 percent, from 158.2 in June to 159.3 in July. This was due to an increase in the constituent section indices of Purchase of Vehicles (1.2 percent) and Operation of Personal Transport (0.5 percent),' reads the statement. On a month-on-month basis, prices were up 0.3 percent in July after a 0.5 percent increase in June. Inflation has been on a downward trajectory since the beginning of the year, from a peak of 9.2 percent in December 2011 to the current levels, reflecting easing inflationary pressures as last year's heavy price increases fall out of the calculation.

The Bank of Botswana's Monetary Policy Committee observes that the medium-term outlook for inflation continues to be positive. 'Weak domestic demand and the forecast modest external inflationary pressures contribute to the positive inflation outlook in the medium term. However, inflation is expected to remain above the bank's objective range of 3-6 percent in the short term, reflecting the impact of transient factors, including recent changes in fuel prices.

 Although inflation is expected to continue to converge to objective range in the medium term, there are upside risks to the inflation outlook which include any unanticipated large increase in administered prices and government levies,' said the bank in a recent statement.