Botswana’s fight against inflation appeared largely successful in 2025, with consumer price growth falling below the central bank’s target range for a second consecutive year. Yet beneath the headline numbers, persistent increases in food prices continued to erode household purchasing power, particularly among lower-income families.
According to Statistics Botswana’s Consumer Price Index review for 2025, average annual inflation eased to 2.7 percent from 2.8 percent in 2024 and well below the 12.1 percent peak recorded in 2022 during the global inflation shock.
The outcome placed inflation beneath the Bank of Botswana’s medium-term objective range of 3 percent to 6 percent, underscoring a sharp reversal from the price pressures that followed the pandemic and supply-chain disruptions.
However, the moderation in overall inflation masked growing pressure in essential household spending categories.
Food and Non-Alcoholic Beverages inflation accelerated to 5.4 percent in 2025 from 4.8 percent the previous year, making it one of the largest contributors to overall price growth. Statistics Botswana noted that sustained increases in food costs could disproportionately affect poorer households and potentially slow progress in reducing poverty.
The steepest increases were recorded in fruits, coffee, tea and cocoa, milk products, and fish. Fruit prices rose by 12 percent during the year, while coffee, tea and cocoa prices increased by 13.9 percent.
The low inflation environment was partly supported by government intervention. Housing, Water, Electricity, Gas and Other Fuels inflation contracted by 1.4 percent following reductions in electricity and water tariffs, helping to offset rising prices in other sectors.
Yet emerging trends suggest inflation risks have not disappeared. Tradeable inflation, which captures goods exposed to international markets and exchange-rate movements, increased to 3.5 percent from 3.0 percent in 2024, indicating growing imported price pressures.
The data highlights a widening gap between macroeconomic indicators and household experience. While Botswana has succeeded in restoring overall price stability, the persistence of food inflation suggests the benefits have not been evenly felt across the economy.