By Turimuye Uandara
Executive summary
- Inflation has become a global phenomenon. The upward pressure on inflation in the global economy is on the back of rising commodity prices and supply chain bottlenecks caused by the Covid-19 pandemic. See figure 1
- Additionally, aggressive vaccine rollouts has led to divergent economic recovery in some countries which has led to an upturn in demand and this resulted in an increase in prices of goods and services
- The annual inflation rate for September 2021 for Namibia increased to (3.5%), up from (2.4%) recorded for September 2020
- The main drivers of an increase in the annual inflation rate were transport, housing, water, electricity, gas and other fuels, furnishings, household equipment and routine maintenance of the house, miscellaneous goods and services and health categories. See figure 2
- On a monthly basis, inflation rate increased by 0.1%
- The main drivers of an increase in the monthly inflation rate was observed in the miscellaneous goods and services, and transport categories
Analysis
- Transport category recorded an increase in the annual inflation rate from (1.3%) to (7.5%). This was mainly influenced by high prices for vehicle related goods (bicycles, motor cars) and the high prices of fuel
- The annual inflation rate for housing, water, electricity, gas, and other fuels increased from (-1.3%) to (1.3%) as a consequence of an increase in the costs of regular maintenance and repair of dwellings
- Furnishings, household equipment and routine maintenance of the house recorded an increase in the annual inflation rate from (2.7%) to (4.8%) as a result of an increase in the price levels of furniture, furnishings, decorations, carpets, floor coverings, and repairs
- The annual inflation rate for miscellaneous goods and services increased from (5.1%) to (6.6%). This was driven by an increase in the demand for financial services
- The annual inflation rate for the health category increased from (2.7%) to (3.5%) due to an increase in the demand for outpatient, medical, dental, and paramedical services
Outlook
- We anticipate that inflation will remain elevated in the short to medium term. This could be ascribed to high oil prices, cost of housing, water and adjusted electricity tariffs.
Figure 1:Annual inflation rate
Figure 1: Namibia and selected Economies Annual Inflation for September 2021
Figure 2: Categorical analysis Year on Year %, Namibia
[1] The Annual Inflation rate used for Botswana and South Africa is for August 2021 and for New Zealand is for June 2021.