In November, annual inflation as measured by the Consumer Price Index (CPI) declined by 1.9 percentage points to 5.0 percent, from 6.9 percent in October. As well as being within the Bank of Botswana’s medium term objective range of 3 – 6 percent, this is the lowest rate of inflation recorded in Botswana since mid-1972. The decline was mainly due to the removal of the impact of the special levy on alcohol sales introduced in November 2008. As a result, inflation for alcoholic beverages and restaurants and cafes fell from 41.8 percent to 9.7 percent and from 19.1 percent to 12.2 percent, respectively. Declines in inflation were also recorded for food and non-alcoholic beverages (from 6.7 percent to 6.1 percent), housing, water and electricity (from 3.5 percent to 3.3 percent), and furnishing, household equipment and routine maintenance (from 10.5 percent to 10.4 percent). However, this was partially offset by the further slowing of deflation for transport (from -6.7 percent to -2.3 percent) as falling fuel prices in the second half of 2008 continue to drop out of the inflation calculation. Inflation also rose marginally for health (from 5.2 percent to 5.5 percent), clothing and footwear (from 8.7 percent to 8.9 percent) and communication (from -0.4 percent to -0.3 percent).
Both measures of core inflation declined in November: the trimmed mean fell slightly by 0.5 percentage points from 5.8 percent in October to 5.3 percent; while, excluding administered prices (which removes the base effects related to fuel prices), inflation fell much faster, from 11.1 percent to 7.7 percent.