Inflation rises even further

Higher and higher: Inflation is expected to only decline from next year
Higher and higher: Inflation is expected to only decline from next year

Inflation reached 6.2% in May, its highest level since April 2013, reflecting the increase in the prices of goods and services.

Inflation was pegged at 5.6% ìn April, another high at the time.

Statistics Botswana researchers today said the increase in May was driven by higher prices of food and alcohol, transport and other commodities.

The latest increase is in line with Bank of Botswana expectations that inflation would top six percent by June before returning to below that level in the first three months of next year.

The central bank maintains a medium term inflation target of between three and six percent. From October 2019 to February this year, inflation was below the lower band of the inflation target, providing room for the BoB to continue with an accommodative monetary policy associated with interest rate reductions.

Inflation this year is being driven broadly by the increase in Value Added Tax, higher fuel levy, increased Botswana Housing Corporation rentals and a range of other increases in administered prices.

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