In January 2010 annual inflation as measured by the Consumer Price Index (CPI) rose by 0.3 percentage points to 6.1 percent, up from 5.8 percent in December 2009 and moving marginally outside the top end of the Bank of Botswana’s medium-term objective range of 3 – 6 percent. As in previous months, the upward pressure was largely due to the continuing impact of base effects arising from fuel price reductions in the second half of 2008 and early 2009. As a result of these, transport price inflation increased from 5.1 percent to 12.2 percent. Other sectors that also contributed to the increase in inflation included housing, water and electricity (3.7 percent to 4.4 percent), furnishing, household equipment and maintenance (10.2 percent to 10.5 percent), communication (–0.4 percent to –0.1 percent), education (3.6 percent to 6 percent) and miscellaneous goods and services (4.8 percent to 5.2 percent). This was, however, significantly offset by falling inflation for food (from 4.7 percent to 3.6 percent), alcoholic beverages and tobacco (9percent to 3.8 percent), health (from 5.4 percent to 1.3 percent), recreation and culture (6.2 percent to 5.9 percent) and restaurants and hotels (from 11.2 percent to 8.4 percent).
The trimmed mean measure of core inflation increased by 0.4 percentage points from 5.3 percent in December 2009 to 6.4 percent; while, excluding administered prices (which include fuel prices), inflation continued to fall, by 1.1 percentage points from 7.0 percent to 5.9 percent.