Connect with us

Hi, what are you looking for?


Commodity prices could go up again

GOING UP: Fuel and other commodity prices

Following the increase in Value Added Tax (VAT) and the introduction of a plethora of other levies last month, commodity prices could soon hike again.

This is because the central bank has cautioned that the potential increase in international commodity prices could spill into the country and drive inflation in an upward trajectory.

Bank of Botswana (BoB) Governor, Moses Pelaelo, said during the recent Monetary Policy Committee (MPC) meeting that risks to the inflation outlook are assessed to be skewed to the upside.

“Upside risks include the potential increase in international commodity prices beyond current forecasts, aggressive action by governments (for example Economic Recovery and Transformation Plan) and major central banks to bolster aggregate demand including the successful roll out of vaccines,” said the Governor.

Pelaelo further said the persistent supply constraints due to lockdowns and travel restrictions could also lead to higher prices.

“Additional domestic factors relate to second-round effects of the recently announced increase in administered prices,” he said.

Advertisement. Scroll to continue reading.

The Governor, however, said these risks are moderated by the possibility of weak domestic and global economic activity, which could be exacerbated by periodic lockdowns and other forms of restrictions due to the emergence of new COVID-19 variants and slow rollout of vaccines, and the possible decline in international commodity prices.

“Furthermore, the emergence of implementation capacity constraints, if any, could hinder the effectiveness of policy stimulus and Economic Recovery and Transformation Plan initiatives, thus resulting in lower inflation.”

Meanwhile, the Governor has also cautioned that the lingering adverse effects of the COVID-19 pandemic containment measures pose uncertainty and challenges given Botswana’s high vulnerability to external shocks, notably, on diamond prices and demand, tourism, and delays in the importation of supplies.

“Nonetheless, the economy is projected to have performed better in the first quarter of 2021 compared to the fourth quarter of 2020, given the gradual easing of COVID-19 movement restrictions and vaccine rollouts in the first quarter,” he noted.

The Ministry of Finance and Economic Development and the International Monetary Fund (IMF) have projected a rebound in economic growth for Botswana in 2021.

The Ministry projects a growth rate of 8.8 percent in 2021, compared to the earlier estimated growth rate of 7.7 percent, before moderating to a growth rate of 5.5 percent in 2022.

IMF on the other side projects the domestic economy to register an 8.3 percent growth in 2021 compared to an earlier projection of 8.7 percent in the January 2021 World Economic Outlook Update.

Advertisement. Scroll to continue reading.

This is expected to moderate to a growth rate of 6.4 percent in 2022.

The Governor said the growth outcome will largely depend on the successful vaccine rollout as it will enable opening up the economy to align with the projections.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like


A 59-year-old woman of Lephane ward in Tonota lost her life after a donkey cart she was traveling in overturned yesterday (Friday). The freak...


*BUAN student narrates her ordeal in leaked statement


Tenants at the popular Francistown Central Market Place have been given a month to vacate the historic informal business area. In a letter written...


A 2019 Alliance for progressives (AP) council candidate for Gumare-Tubu ward in North West District, Taejoruavi Maekopo, who was recently convicted for raping a...


The Court of Appeal has upheld an Appeal by Landmark Projects (PTY) LTD, Van & Truck Hire PTY LTD to be awarded the tender...


A Mahalapye Magistrates court this week denied bail to two men Oagile Bareetseng and Keorapetse Gabaotshware who are accused of robbery. The robbery incident...


Francistown High Court Judge Bengbame Sechele recently convicted and sentenced two men accused of stock theft to seven years each in jail. The court...


Couple in court after dreams of marriage fall apart A woman hoping to heal her hurting heart with a big payday left Molepolole Magistrate...


Youth accuses cop of stabbing and shooting him A youth who claims he was beaten black and blue, stabbed and then repeatedly shot by...


Heroic trio praised for putting out a raging inferno Three brave individuals prevented what could have been an disaster on Monday afternoon, putting out...


A famous pastor from Molepolole could find himself in a hell of a lot of trouble following accusations he molested a 16-year-old schoolgirl. 28-year-old...


VP LAUNCHES GAME FARMING GUIDELINES IN MAUN As part of their efforts to promote optimal use of farming lands, government are looking at ways...


I DO NOT RECOGNISE PARTY STRUCTURE- WATSHIPI Botswana National Front suspended Parliamentary candidate for Lentsweletau/Mmopane has continued to defy party orders to appear for...


I AM BEST PLACED TO MOVE BCP FORWARD- KEKGONEGILE Having been a President of Botswana Land Boards and Local Government Workers Union (BLLAWU) at...


Meet Gosego Mosweu, a 29-year-old Manageress of Dinaka camp, situated just outside Central Kgalagadi Game Reserve (CKGR). The camp is run by one of...


Diamond giant pays over P12 billion in taxes and economic contribution De Beers Group, through its parent company, Anglo American, has announced it spent...


Copyright © TheVoiceBW. (Since1993) made with ❤️ in Botswana.