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Botswana's headline inflation dropped to 1.5% in September due to reduced fuel prices. The reduction from August's 3.9% breaches the lower bound of the medium-term objective range of 3 – 6%.
According to the Bank of Botswana, the decrease in inflation between August and September 2024 was mainly due to the base effects associated with the increase in domestic fuel prices on 13 September 2023, which added 1.31 percentage points to headline inflation.
"Furthermore, inflation fell due to the reduction in domestic fuel prices effected on 11 September 2024, which subtracted 0.8 percentage points from headline inflation, as well as the deceleration in the rate of annual price change for most categories of goods and services," the bank said.
Inflation for goods traded within Botswana increased from 4.1% to 4.3% between August and September 2024, due to the broad-based increase in food prices. However, inflation for imported goods decreased sharply from 5.2% to -0.2% during the same period, mainly because of base effects associated with the upward adjustment of domestic fuel prices in September 2023 and the downward adjustment in domestic fuel prices in September 2024.
As a result, all tradeables inflation decreased from 4.9% to 0.9% between August and September 2024. Inflation for non-tradeables declined slightly from 2.5% to 2.4% in the same period.