Business

Inflation slows to 2.8%

Mbongeni Mguni | Thursday July 18, 2024 11:16

Stabilising: An index measuring average cooking oil prices has declined by 9.9% in the 12 months to June 2024. Govt cut VAT on cooking oil last year
 
Stabilising: An index measuring average cooking oil prices has declined by 9.9% in the 12 months to June 2024. Govt cut VAT on cooking oil last year

Statistics Botswana figures indicate that the annual rate of inflation was slightly softer in June owing to base effects particularly associated with transport.

In the 12 months to June 2024, the single highest increase in average prices has been in insurance services at 12.1%, while the average prices of oils and fats have retreated the most, declining by 9.9 percent. Government last year removed Value Added Tax on oils and fats, bowing to public outrage after an extended rally in prices of the commodities.

The Bank of Botswana has said it expects inflation to remain within the three to six percent objective range in the short and medium term, with risks to the outlook assessed to be balanced. Upside risks to the outlook include higher food prices due to the El Niño drought, international commodity prices increasing beyond current forecasts, the persistence of supply and logistics, as well as geoeconomic fragmentation. The central bank projects that inflation will average 3.6 percent in 2024 and 4.5 percent in 2025.