Ominous signs as inflation expectations rise

Choppy seas ahead: Inflation is at a 14-year high and firms expect prices to stay higher this year PICS: PHATSIMO KAPENG
Choppy seas ahead: Inflation is at a 14-year high and firms expect prices to stay higher this year PICS: PHATSIMO KAPENG

The hikes in interest rates made by the Bank of Botswana (BoB) earlier this year have apparently failed to cool inflation expectations in the economy, as local firms now expect general prices to rise by an average 8.5 percent this year, from an initial forecast of 8.3 percent.

The latest revelations are contained in the BoB’s Business Expectations Survey (BES) released this week which samples the opinions of a cross-section of firms about the business environment from the second quarter of the year and beyond.

In raising interest rates by 101 basis points in April and June, the BoB said the adjustments were needed to manage inflation expectations in the economy, noting the first quarter BES had shown worrying expectations among local firms.

Editor's Comment
Happy Independence!

We are 56 years old and what do we have to show for it? Looking at where Botswana started and where it is today, there are a lot of developments, but whether the developments match the number of years we have enjoyed as a country is a topic for another day.The fact that cannot be denied is we have seen major developments, but we are still lacking in several pertinent areas.Our beautiful country imports almost everything. We import fuel, food,...

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