According to Statistics Botswana, headline inflation decreased from 4.6 percent in June 2023 to 1.5 percent in July 2023, breaching the lower bound of the Bank’s medium-term objective range of 3 – 6 percent, and was significantly lower than the 14.3 percent in July 2022. The fall in inflation between June and July 2023 was mainly due to base effects associated with the upward adjustment in domestic fuel prices effected on June 28, 2022, which added 1.13 percentage points to headline inflation in July 2022. Inflation also fell on account of the downward adjustment in domestic fuel prices effected on June 21, 2023, which subtracted 0.59 percentage points from headline inflation. Meanwhile, there were partially offsetting movements in the annual price changes for other categories of goods and services, while for the ‘Clothing and Footwear’, ‘Education’ and ‘Recreation and Culture’ categories, prices were unchanged at 5.6 percent, 5.1 percent, and 1.9 percent, respectively. Inflation fell with respect to: Transport (from 1.3 to -7.6 percent); Food and Non-Alcoholic Beverages (from 12.9 to 10.7 percent); Health (from 3.6 to 2.7 percent); Restaurants and Hotels (from 6.5 to 5.8 percent); Housing, Water, Electricity, Gas and Other Fuels (from 1.3 to 0.9 percent); Furnishing, Household Equipment and Routine Maintenance (from 5.6 to 5.3 percent); Miscellaneous Goods & Services (from 8.7 to 8.5 percent), and Communication (from 2.5 to 2.4 percent). The downward pressure on inflation was partly offset by inflation increasing with respect to: Alcoholic Beverages and Tobacco (from 4.8 to 5.1 percent).
Similarly, the 16 percent trimmed mean inflation and inflation excluding administered prices decreased from 4.3 percent and 7.1 percent to 2.5 percent and 5.9 percent, respectively, in the same period.