Headline inflation dipped by 0.6 percentage points in March, registering 10.0 percent year/year (from 10.6 percent year/year in February).
Despite the deceleration, FNBB warns that risks to the headline figure remain tilted to the upside, with the main contributors remaining transport, which accounted for 5.4 percentage points, housing and utilities, which made up 1.3 percentage points, food and non-alcoholic beverages (+0.9 percentage points) and miscellaneous goods and services (+0.7 percentage points).
As a result of the Russia/Ukraine war, which led to a drastic increase in oil prices, the Botswana Energy Regulatory Authority (BERA) adjusted local fuel prices upwards on 29 March 2022 — unleaded petrol 93 increased by P1.26, unleaded petrol 95 increased by P1.25, diesel 50ppm increased by P1.49, and illuminating paraffin by P1.74.
Additionally, FNBB Quant Gomolemo Basele warns that Botswana Housing Corporation’s (BHC) rental prices are expected to be revised upwards due to reduced subventions from the government to major parastatals. “These factors, together with our expectation for local food prices to continue to tick up because of import substitution policies, results in our expectation for inflation to average 7.1 percent in 2022.