Botswana’s inflationary pressures continue to build up in the economy as reflected by the March inflation rate which rose to 7.6% year-on-year from 7.5% in February, according to data released by Statistics Botswana (SB).
SB said on Tuesday that on a monthly basis, inflation stood at 0.6% m/m in March, up from 0.2% m/m in February.
Analyst Garry Juma of Motswedi Brokers said this month’s inflation is also expected to rise following an electricity traffic hike.
“The April inflation rate is widely expected to come out even higher given the 10% average increase in electricity tariffs which was effected beginning 1 April by Botswana Power Corporation,” Juma said.
SB noted that contributing to the March inflation numbers were increases in the ‘alcoholic beverages, tobacco and narcotics’ group, the ‘transport’ group and ‘housing’ group.
However, Juma said it is encouraging to note that food prices appear to be somewhat stable and increasing prospects for inflation to fall further during the year.
He added that more increases in fuel prices (which is likely) before the end of this year will also slow down the decline of the country’s inflation and delay inflation reaching the 3%-6% Bank of Botswana objective range.
“We have revised upwards our inflation forecast and we now expect inflation to reach the Bank of Botswana target range during the third quarter of 2013 before closing the year at 5.1% y/y,” said Juma.