BoB Holds Rates Steady at 2.4 Percent 

  • Notes headline inflation at 2.9% in March from 3.9% in February
  • Waning impact of 2023 fuel prices takes the credit
  • Projects average inflation rate of 3.2% in 2024 and 5% in 2025
  • MoF projects accelerated growth to 4.2% and 5.4% in 2024 and 2025


At its meeting on 26 April 2024, the Monetary Policy Committee (MPC) of the Bank of Botswana (BoB) announced its decision to maintain the Monetary Policy Rate (MoPR).

This decision comes amidst a backdrop of considerations, including inflation trends, economic performance and growth projections.

In its deliberations, the MPC noted a significant decrease in headline inflation, which fell from 3.9 percent in February to 2.9 percent in March 2024, breaching the lower bound of the medium-term objective range of 3 – 6 percent.


The decline was primarily attributed to the waning impact of the previous year’s increase in domestic fuel prices, reflecting base effects.

Looking forward, the MPC forecasts inflation to dip to 2.3 percent for April 2024, remaining below the lower bound temporarily before reverting to within the objective range by the third quarter of 2024.

Projections suggest an average inflation rate of 3.2 percent in 2024 and 5 percent in 2025, influenced by various factors including base effects, subdued domestic demand, and revised forecasts of international food prices.

Slightly skewed

While risks to this trajectory are slightly skewed to the upside due to potential increases in commodity prices and supply constraints, they are mitigated by prospects of weaker economic activity both domestically and globally.

Evaluating economic performance, the MPC highlighted a slowdown in real GDP growth to 2.7 percent in 2023, down from 5.5 percent in 2022, primarily attributable to subdued mining activity.

Despite global output growth forecasts remaining steady at 3.2 percent for both 2024 and 2025, the MPC notes that the Ministry of Finance projects accelerated growth to 4.2 percent and 5.4 percent in 2024 and 2025, respectively, buoyed by growth-enhancing reforms and supportive macroeconomic policies.

Economic transformation

It says these reforms, including the stimulus budget announced in February 2024, supportive monetary and fiscal policies, improvements in infrastructure and utilities, and ongoing economic transformation initiatives, are expected to bolster growth prospects and mitigate inflationary pressures.

In its decision to maintain the MoPR at 2.4 percent, the MPC emphasised its recognition of the economy operating below full capacity in the short term, thereby not generating demand-driven inflationary pressures.

Despite inflation temporarily lingering below the lower bound, the MPC anticipates it to converge within the medium-term objective range and edge towards the upper bound by 2025.

Business expectations

Business sentiment, as reflected in the latest Business Expectations Survey, aligns with this outlook, expecting inflation to be within the medium-term objective range but closer to the upper bound by 2025.

“The economy is expected to operate below full capacity in the short term,” it said in a statement that also emphasised the medium-term outlook for inflation and business expectations. “Hence, the MPC decided to maintain the MoPR at 2.4 percent.”