Inflation softens marginally

Statistics Botswana figures indicate that the annual rate of inflation was slightly softer in May owing to base effects associated with the movement of prices in the corresponding period last year.

Statistics Botswana’s data analysis revealed that Miscellaneous Goods & Services, Transport, and Food & Non-Alcoholic Beverages were the major contributors to the May 2024 annual inflation rate.

Separately, the Bank of Botswana has said it expects inflation to remain within the three to six percent objective range in the short and medium term, with risks to the outlook assessed to be balanced. Upside risks to the outlook include higher food prices due to the El Nino drought, international commodity prices increasing beyond current forecasts, the persistence of supply and logistical as well as geoeconomic fragmentation.

The central bank projects that inflation will average 3.6 percent in 2024 and 4.5 percent in 2025, while the latest Business Expectations Survey shows that local firms also expect inflation in the medium term to remain within the objective range. On a quarterly basis, the BoB expects that inflation will average 3.5 percent in the second quarter of this year, before rising to four percent in the third quarter and 3.2 percent in the last quarter.