The rate of increase in the prices of goods and services reached 11.9% in May, the highest level since January 2009, powered by the recent adjustment in fuel pump prices.
Inflation was measured at 9.6 percent in April, having come down from 10% in March and 10.6% in both February and January.
Data released by Statistics Botswana this morning (Wednesday) indicates that the biggest contributor to the latest inflation figure was the transport sector, under which movements in fuel prices are recorded. Retail pump prices of petrol and diesel rose by an average P1.92 on May 13, in the second adjustment of the year after an average P1.33 increase on March 29.
The Botswana Energy Regulatory Authority has said Russia’s invasion of Ukraine and the resultant sanctions on Moscow have disrupted global oil markets, pushing crude prices by more than 30% from February 24 when the attack began.
The pula weakening against the dollar this year, has worsened the situation, with the local currency losing nearly five percent of its value against the greenback which is the currency used in the global oil market. The National Petroleum Fund, a statutory buffer traditionally used to lessen the volatility of oil prices on local pump prices, has also been running at low levels.
Statistics Botswana figures indicate that between April and May, besides the transport index, other contributors to the higher inflation include the Food and Non-Alcoholic Beverages index and the Restaurants and Hotels index.
“The Food and Non-Alcoholic Beverages group index rose by 2.6 percent owing to a general increase in the constituent section indices, predominantly oils and fats, vegetables as well as Bread and Cereal,” Statistics Botswana researchers said.
Other food items that recorded increases in prices between the two months include mineral water, soft drinks, fruits and vegetables, and fish and meat.
The Bank of Botswana recently increased the bank rate for the first time in 14 years, explaining that there was a need to manage inflation expectations in the local market. For consumers, the rising prices of goods and services, combined with the higher cost of debt brought by the bank rate adjustment, add to the troubles they have been experiencing since the pandemic began.