Business & Finance

Inflation Increases to 2.5 Percent in April

Inflation increased from 2.2 percent in March to 2.5 percent in April 2020, but remained below the lower bound of the Bank’s medium-term objective range of 3 – 6 percent, and was the same as in April 2019. According to the latest data from Statistics Botswana, the increase in inflation between March and April 2020 was led by ‘Housing, Water, Electricity, Gas and Other Fuels’ (from 1.5 to 6.1 percent – mainly reflecting the upward adjustment in electricity tariffs, which is estimated to have added approximately 0.78 percentage point to inflation in April 2020). The other category contributing to the higher inflation was ‘Health’ (from 0.9 to 1.2 percent). However, the impact of the increase in the electricity tariffs was moderated by the fall in annual price changes for other commodity groups, notably, “Miscellaneous Goods and Services”(from 5.1 to 1.2 percent – reflecting base effects associated with the increase in insurance fees in April 2019), followed by: Alcoholic Beverages and Tobacco (from 4.8 to 3.5 percent); Food and Non-alcoholic Beverages (from 3.4 to 3.1 percent); Transport (from 0.8 to 0.6 percent); and Recreation and Culture (from -0.3 to -0.4 percent). Meanwhile, prices were stable for: Education (4.7 percent); Restaurants and Hotels (3.6 percent); Furnishing, Household Equipment and Routine Maintenance (2.9 percent); Clothing and Footwear (1.7 percent); and Communication (0.3 percent).
The 16 percent trimmed mean inflation and inflation excluding administered prices decreased slightly from 1.9 percent and 2.7 percent to 1.8 percent and 2.6 percent, respectively, between March and April 2020.

Source: Bank of Botswana