In April, annual inflation as measured by the Consumer Price Index (CPI) rose from 6.1 percent to 7.1 percent. This is 1.1 percentage points above the upper end of the Bank of Botswana’s medium-term objective range of 3 – 6 percent. The 2 percent increase in VAT, effective April 1, 2010, affected several commodity groups, leading to the rise in inflation. Inflation accelerated for commodity groups including food (from 2.9 percent to 3.8 percent), alcohol and tobacco (from 3.3 percent to 6.7 percent) housing, water and electricity (from 4.0 percent to 4.6 percent), health (from 1.7 percent to 2.9 percent), transport (from 12.4 percent to 13.9 percent), communication (from 0.0 percent to 0.7 percent), restaurants and hotels (from 7.1 percent to 9.3 percent) and miscellaneous goods and services (from 5.8 percent to 8.3 percent). However, inflation was lower with respect to clothing and footwear (from 8.5 percent to 8.2 percent), furnishing, household equipment and maintenance (from 10.8 percent to 9.4 percent), recreation and culture (from 6.9 percent to 5.8 percent).

 The trimmed mean core inflation rate also rose from 6.5 percent to 7.7 percent while, when excluding administered prices, inflation accelerated from 5.6 percent to 6.8 percent.