New electricity tariffs to trigger inflation rise

Over the past two months the country’s annual inflation has remained stable, although current developments have potential to swing up inflation rate. Statistician General Burton Mguni, this week said the annual inflation rate in March 2020 was 2.2 percent, the same as in February 2020.

“All-tradeables inflation rate stood at 2.1 percent in March 2020, recording a drop of 0.1 of a percentage point from 2.2 percent recorded in February 2020,” said Mguni. He said the main contributors to the March annual inflation rate were food and non-alcoholic beverages at 0.5 of a percentage point, miscellaneous goods and services at 0.5 of a percentage point and housing, water, electricity, gas and other fuels at 0.3 of a percentage point.

Meanwhile forecast on inflation rate by economic analyst Garry Juma at Motswedi Securities indicates a potential rise, on the backdrop of Botswana Power Corporation’s (BPC) electricity tariffs increase by 22 percent effective from April 1. “There will be an uptick due to increase in administered prices but this will taper off, as it’s a once off increase,” said Juma. He however, highlighted that it is too early to predict the effect of COVID-19 on inflation.