This is according to figures released by Statistics Botswana in the “Consumer Price Index: September 2021” publication.
The trend follows an upward spiral in the second quarter that saw the inflation rate break the upper bound of the Bank of Botswana’s objective rate. The rate seems to be receding after reaching a peak of 8.9 percent in July 2021. The reductions in August and September, whilst small, are a positive sign.
The main contributors to the annual inflation came from the Transport sector, which dropped 4.0 percent as an effect of the changes in global oil prices. Research reveals that crude oil prices dropped during the pandemic due to a drop in demand. However, while economic recovery is underway, oil prices continue to be affected by global uncertainties, according to economic analysts.
Housing, Water, Electricity, Gas & Other Fuels, Food & Non-Alcoholic Beverages and Miscellaneous Goods & Service also registered significant reductions. These are anticipated to remain the main drivers in the foreseeable future.
There is also a growing margin between rural and the urban areas. The inflation rates for regions between August 2021 and September 2021 indicated that the Rural Villages inflation rate stood at 8.0 percent in September, a decrease of 0.8 of a percentage point on the August rate of 8.8 percent. The Cities & Towns inflation rate declined by 0.3 of a percentage point, from 8.7 percent in August to 8.4 percent In September, while the Urban Villages inflation rate stood at 8.6 percent in September, a drop of 0.3 of a percentage point on the August rate of 8.9 percent.
The national Consumer Price Index, which measures the average change in prices over time that consumers pay for a basket of goods and services, accelerated by 0.5 percent from August 2021 to September 2021. The Cities & Towns index also experienced a rise of 0.5 percent in the same period. The Urban Villages index advanced from 112.3 percent in August to 112.9 percent in September 2021, a growth of 0.5 percent, whereas the Rural Villages index recorded an increase of 0.2 percent.
The group indices were generally moving at a stable pace between August and September 2021, recording changes of less than 1.0 percent, except the Education group index which recorded 1.0 percent. The Education group index recorded a rise of 1.0 percent between August and September. This was due to an increase in the constituent section index of Secondary & Tertiary Education by 1.6 percent.
The Furnishing, Household Equipment & Routine Maintenance group index moved from 108.4 to 109.3, recording a rise of 0.8 percent. This was due to the general increase in the constituent section indices, except for the Glassware, Tableware & Household Utensils section index which recorded a drop of 0.1 percent.
However, the inflation rate remained above the central bank’s target range of 3 to 6 percent. Oil prices have been forecasted to rise as demand increases while there is a decrease in supply.
This article was prepared by Data Collection & Analysis, a business research firm. Feedback or enquiries can be relayed to 76740658./ research@easternman.co.bw
