Botswana inflation slows

GABORONE – Botswana’s annual inflation rate slowed in February to 7,2 per cent from 7,4 per cent previously, official data showed yesterday, but was expected to pick up pace again over the next few months.

The Central Statistics Office said the slowdown, which was largely due to a lower increase in school fees and beef prices, followed a sharp easing from 8,5 per cent in December and continued the downward trend after inflation jumped to 11,4 per cent on the devaluation of the pula currency in 2005. But prices should rise on higher public service salaries in the months ahead.CSO Statistician Kgotlaganang Kgakololo said that 2007 government employees’ salary increase of six per cent across the board would force money supply up in two months’ time.”As a result of that retailers and producers will likely pick up their prices leading to an inflation increase,” he said.Botswana introduced a formal inflation target of three-six per cent in February 2006, but indicated that the target would not be achieved in that year due to the impact of the pula’s devaluation in May 2005.Nampa-ReutersBut prices should rise on higher public service salaries in the months ahead.CSO Statistician Kgotlaganang Kgakololo said that 2007 government employees’ salary increase of six per cent across the board would force money supply up in two months’ time.”As a result of that retailers and producers will likely pick up their prices leading to an inflation increase,” he said.Botswana introduced a formal inflation target of three-six per cent in February 2006, but indicated that the target would not be achieved in that year due to the impact of the pula’s devaluation in May 2005.Nampa-Reuters