Consumer price inflation in Botswana accelerated to 14.3 percent y/y in July from 12.7 percent y/y in June. Contributing to this high print were increasing prices for major CPI components such as transport, food and non-alcoholic beverages, housing, water, electricity, gas and other fuels, and miscellaneous goods and services. A weaker currency also added topside pressure to the July inflation reading. The reduction in the VAT rate from 14 percent to 12 percent announced at the end of July might ease inflation pressures going forward. That said, inflation remains notably above the upper band of the Bank of Botswana’s 3 percent-6 percent target range, suggesting that the MPC may continue to tighten monetary policy at next week’s meeting.
