Inflation eases but...

Figures released recently by Statistics Botswana show that inflation eased to 10% in March, from 10.6% in February, both of those levels representing 13-year highs.

The drop in March was largely due to lower movements across the various goods and services monitored by Statistics Botswana, as compared to the same period last year.

The drop in March is the first reduction in inflation since November last year, from which point the rate has been rising to a peak of 10.6% in January and February.

Inflation for April is expected to rise significantly as the March 28 fuel price increase averaging P1.33 was most likely not included in the March inflation figure.

Analysts at Kgori Capital, who had projected inflation to print at 9.9% for March, said they expected the rate to steadily decline this year but remain above the Bank of Botswana’s objective range of three to six percent.

The analysts expect inflation to return to the objective range in the first quarter of 2023 and have singled out oil prices as the biggest upside risk to inflation.

The International Monetary Fund (IMF), meanwhile, expects local inflation to average 8.9% this year, a level that would represent decade-long highs.

In its World Economic Outlook released on Tuesday, the IMF projects that local inflation will average 4.5% in 2023.