Inflation in Botswana increased to 8.8% in October, from September’s reading of 8.4%, fuelled by the rise in fuel prices earlier in the month. 

At the current rate, the level of inflation is the second highest this year, following the 8.9% recorded in July. Since then, inflation fell to 8.8%, then 8.4% before the surge last month.

Statistics Botswana stated that as well as the transport industry, other inflation pressure between September and October stemmed from elevated prices of alcoholic beverages, tobacco and food, as well as clothing and footwear.

Inflation has been trending at nine-year highs since the middle of the year, fuelled by hikes in VAT from earlier in the year. Since January, inflation has increased by over three and a half times. 

According to Statistics Botswana’s latest report, the pressure on households is evident. Over the past 12 months, within the food and non-alcoholic sector, the prices of oils and fats have increased by around 26%, whilst bread and cereals rose by 6.2%. Furthermore, meat prices have risen by approximately 6% over the last year. On a monthly basis, consumer prices inched up 0.9%, the biggest increase in six months, following a 0.5% rise in the prior month.

These latest trends are in line with forecasts from Kgori Capital that the rate of inflation would increase in October due to the fuel price rise, before the deceleration seen since August continues. In addition, the Bank of Botswana predicts inflation to return to the 3-6% target range by the second quarter of next year.