Inflation fell significantly from 2.4 percent in May to 0.9 percent in June 2020, remaining below the lower bound of the Bank’s medium-term objective range of 3 – 6 percent and lower than the 2.8 percent in June 2019. According to the latest data from Statistics Botswana, the significant decline in inflation between May and June 2020 mainly reflects the downward adjustment in domestic fuel prices in June 2020, which is estimated to have reduced inflation by approximately 1.65 percentage points, as reflected in the reduction in inflation of the ‘Transport’ category from -0.1 to -6.7 percent. The decrease in inflation also reflects the easing in the rate of annual change in prices for: Housing, Water, Electricity, Gas and Other Fuels (from 6.2 to 5.7 percent); Furnishing, Household Equipment and Routine Maintenance (from 2.9 to 2.3 percent);; Miscellaneous Goods and Services (from 1.3 to 1.1 percent); Restaurants and Hotels (from 3.6 to 3.5 percent); and Recreation and Culture (from -0.7 to -0.8 percent). However, this was partially offset by the increase in inflation for: Alcoholic Beverages and Tobacco (from 2.3 to 5.4 percent); Food and Non-alcoholic Beverages (from 3.2 to 3.6 percent); Clothing and Footwear (from 2 to 2.2 percent); and Health (from 1.3 to 1.4 percent). Inflation remained unchanged for ‘Education’ (4.7 percent) and ‘Communication’ (0.4 percent).
The 16 percent trimmed mean inflation fell from 1.6 percent to 1 percent, while inflation excluding administered prices increased from 2.6 percent to 2.8 percent in the same period.