JOHANNESBURG (Reuters) - The Bank of Botswana said on Wednesday a poll it conducted between March and April showed the business sector had revised downwards its inflation expectations for 2010 despite recent value-added tax increases.
"There has been a further downward revision of expectations for inflation in 2010 to 8.8 percent compared to 10.2 percent in the previous survey," the Bank said in a statement posted on its website.
"This is despite the increase in the standard rate of VAT from 10 percent to 12 percent that had been announced in February, shortly before the survey commenced."
It said businesses were nearly unanimous in seeing next year's inflation at 9.5 percent, above the central bank's target of between 3 to 6 percent.
Inflation quickened to 7.8 percent year-on-year in May and the central bank expects it to return to the target range on a sustained basis from the second half of 2011.
The survey showed business were much more optimistic on prevailing operating conditions than in the previous survey.
"The overall confidence in prevailing business conditions for the current survey period was 55 percent, compared to 47 percent in the previous survey," the statement said.
"This suggests a positive attitude among businesses at a time when most indicators were pointing to a relatively smooth recovery from the global recession".
The central bank said however, since the survey was conducted there was renewed uncertainty about the strength of the global economy, which may impact on the prospects of the local economy.
