In May 2020, inflation decreased slightly from 2.5 percent in April to 2.4 percent in May 2020, remaining below the lower bound of the Bank’s medium-term objective range of 3 – 6 percent and lower than the 2.6 percent in May 2019. According to the latest data from Statistics Botswana, the decrease in inflation between April and May 2020 mainly reflects the downward adjustment in domestic fuel prices in April 2020[1], which is estimated to have reduced inflation by approximately 0.13 percentage points in May 2020, as indicated under ‘Transport’ (0.6 to -0.1 percent). The decrease in inflation during May 2020 also reflects the easing in the rate of annual change in prices for ‘Alcoholic Beverages and Tobacco’ (from 3.5 to 2.3 percent) and ‘Recreation and Culture’ (from -0.4 to -0.7 percent). However, the downward pressure on inflation was partly offset by inflation increasing with respect to: Clothing and Footwear (from 1.7 to 2 percent); Food and Non-alcoholic Beverages (from 3.1 to 3.2 percent); Housing, Water, Electricity, Gas and Other Fuels (from 6.1 to 6.2 percent); Health (from 1.2 to 1.3 percent); Communication (from 0.3 to 0.4 percent); and Miscellaneous Goods and Services (from 1.2 to 1.3 percent). Inflation remained unchanged for: Education (4.7 percent); Restaurants and Hotels (3.6 percent); and Furnishing, Household Equipment and Routine Maintenance (2.9 percent).

 The 16 percent trimmed mean inflation fell from 1.8 percent to 1.6 percent, while inflation excluding administered prices remained unchanged at 2.6 percent, between April and May 2020.

 

 

  1. The adjustment in fuel prices effected on April 21, 2020, after Statistics Botswana had completed the April 2020 CPI survey; as such, the adjustment was captured in the May 2020 survey.