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Botswana’s inflation drops, edges towards central bank target

Botswana’s national year-on-year inflation rate has dropped sharply towards the central bank’s 3-6% objective, according to Statistics Botswana on Tuesday.

The office announced that inflation dropped to 6.1% year-on-year in May from 7.2% year-on-year in April, following declines in most group indices.

Analyst have indicated that Botswana’s inflation will continue to fall

“Our forecast is that inflation will continue on the downward trajectory and will fall within the 5.9% to 4.2% range up to the end of the year,” said Garry Juma, an economic analyst from Motswedi Securities Brokers.

Juma said positive exchange rate movements between the Pula and the Rand, generally stable fuel prices on the international market and subdued inflationary pressures domestically and internationally have also contributed to lower inflationary pressures.

He further said improved inflation environment coupled with generally weaker domestic economic outlook would likely push the Bank of Botswana to cut interest rate further before the end of this year.

The last interest rate decision by the Bank of Botswana was a downward review from 9.5% to 9.0% in April this year. 

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