Inflation slows despite tariff jump

The latest inflation levels represent a softening in the rate of price increases, following the jump to double figures a few months ago due to fuel prices and the war in Iran. Statistics Botswana figures indicate that indices tracking most goods and services were softer on an annual basis in August, except for housing, water, electricity, gas & other fuels, which rose by 10 basis points.

The key transport index, which has been driving inflation this year as it covers fuel prices, contributed 5.1 percent to annual inflation in August, from 5.2 percent in July and 7.3 percent in June. Month-on-month, the Consumer Price Index rose by 0.4 percent between July and August, largely influenced by an across-the-board increase in electricity prices, which rose by nine percent on August 1. Consumers are finding cold comfort in the decelerating inflation, as wages continue to be stagnant across the economy, while unemployment remains stubbornly high. More worrying for consumers is the possibility that government may reintroduce key levies that it suspended from pump prices in April. The levies were suspended in April for six months and could potentially return in October, effectively increasing fuel prices.