Inflation in Botswana eased to 10% last month, from February’s figure of 10.6%, according to the latest data published by Statistics Botswana, both representing 13-year highs.

The fall in inflation in March was predominantly due to a reduction in movements across the various goods and services monitored by Statistics Botswana, compared to the same month last year.

The decline in March is the first drop in inflation since November 2021. Since then, the rate has been on an upward trajectory to a high of 10.6% in the first two months of the year.

However, inflation for this month is forecast to increase significantly, according to a Mmegi report, as the 28th March fuel price hike was likely not included in the March inflation figure.

Kgori Capital analysts, who had forecast inflation at 9.9% for March, predict the rate will steadily fall throughout 2022. However, they forecast it will remain above the Bank of Botswana’s 3-6% range.

In addition, the analysts predict inflation will return to this objective range in Q1 next year, and point to oil prices as the most significant upside risk to inflation.

Meanwhile, the International Monetary Fund forecasts local inflation to stand at an average 8.9% in 2022, which would indicate 10-year highs.

As part of its World Economic Outlook published on Tuesday, the IMF forecasts local inflation will average at 4.5% in 2023.

Moreover, Botswana’s economy grew by 12.1% last year, surpassing the previous forecast of 8.5%, fuelled by a strong performance of the non-mining sectors, especially public sector services. The underperforming sectors in the country include accommodation and food services, agriculture, forestry and livestock.

Yet Fitch Solutions have reduced Botswana’s GDP growth forecast from 5.3% to 4.8% as a result of economic headwinds stemming from inflation and the war in Ukraine. However, forecast growth will be driven by a rise in diamond prices, fixed investments and household spending, along with easing Covid restrictions.