Executive summary
- The annual inflation rate increased to 7.1% for August 2022 from 3.5% recorded during the same period last year. See figure 1
- The annual inflation rate averaged 5.8% from January to September 2022 compared to an average of 3.5% recorded during the same period last year. This was mainly derived from the transport inflation category which emanated from high and volatile international crude oil prices in 2022
- The main drivers of an increase in the annual inflation rate were transport, hotels, cafes and restaurants, furnishings household equipment, and routine maintenance of the house and food alcoholic beverages, and tobacco. See figure 2
- On a monthly basis, inflation increased by 0.1% influenced by the price levels changes in transport (from 0.2% to -1.6%); housing, water, electricity, gas and other fuels (from 0.3% to 0.1%); recreation and culture (from 0.7% to 0.3%) and food and non-alcoholic beverages (from 0.8% to 0.6%)
Analysis
- The annual inflation rate for the transport category increased to 19.5% from 7.5% recorded during the same period last year. This was mainly influenced by an increase in the prices of fuel (petrol and diesel) driven by an increase in oil prices globally and an increase in the cost of public transportation services
- An increase in the annual inflation rate for hotels, cafes, and restaurants from 0.2% to 11.0% was driven by an upturn in demand for accommodation services due to a rebound in tourism-related activities
- The annual inflation rate for furnishings household equipment and routine maintenance of the house increased to 9.4% from 4.8%. This was due to an increase in the price levels of goods and services for routine household maintenance and heating and cooking appliances, refrigerators, washing machines, and similar major household appliances
- Food and non-alcoholic beverages and tobacco which accounts for 16.5% of the inflation basket recorded an increase in the annual inflation rate of 9.3% from 5.0% recorded during the same period last year. This came as a consequence of an increase in the price levels of bread and cereals, fruits and oils, and fats
- The communications category recorded deflation of – 0.3% for September 2022 declining from 0.9% recorded in September 2021. This could have been influenced by face-to-face engagement after the removal of the Covid-19 restrictions
Figure 1: Annual Inflation rate, Namibia
Figure 2: Sub-Categorical analysis Year on Year %, Namibia
Outlook
- Announcements made by Namibia Breweries Limited on an increase in the price levels of alcoholic and non-alcoholic beverages and OPEC production out cuts will propel the transport and alcoholic beverages components of inflation and in turn annual inflation rate for October 2022
- We anticipate that the annual inflation rate for October will remain on an upward trend.
- We anticipate that the inflation will remain higher for longer.