Botswana’s vehicle market is expected to contract in 2026 as rising inflation, tighter monetary conditions, and unfavourable currency movements squeeze household purchasing power and delay fleet investment, according to a report by BMI Fitch Solutions. It said total vehicle sales are now projected to fall 0.3 percent year-on-year to 45,271 units, reversing earlier expectations of a rebound and leaving volumes more than 12 percent below pre-pandemic levels.
The downgrade reflects macroeconomic pressures that intensified through 2025 and are set to persist into 2026. Although inflation is forecast to remain within the Bank of Botswana’s 3–6 percent target range, it is expected to accelerate from an average of 3 percent in 2025 to around 5.6 percent next year. Monetary policy has already responded with a cumulative 160-basis-point rate hike in late 2025, lifting the policy rate to 3.5 percent. While interest rates are expected to stabilise in the first half of 2026, room for easing is limited as the pula is projected to depreciate 4.7 percent by year-end.
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