VAT will push inflation out of range 'til 2011-BoB :: Mmegi Online

Mainly driven by the increase in Value Added Tax (VAT) effective from April, inflation will not be expected to fall back within the Bank of Botswana's 3 to 6 percent objective range until the first quarter of next year.

VAT will increase from 10 percent to 12 percent in April as announced in the national budget for 2010/11 recently.A statement released by BoB PRO Chepete Chepete yesterday says the Monetary Policy Committee (MPC) anticipates that following a short-term spike resulting from the impact of the increase in VAT, inflation will fall within the 3 to 6 percent objective range only in 2011.

Inflation, which registered a remarkable decrease in 2009 that led BoB to cut the Bank Rate by five percentage points during the year, has been on the increase in the past two months, settling at 6.1 percent in January.

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VAT will push inflation out of range 'til 2011-BoB

Mainly driven by the increase in Value Added Tax (VAT) effective from April, inflation will not be expected to fall back within the Bank of Botswana's 3 to 6 percent objective range until the first quarter of next year.

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