Category: Inflation

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.

Executive summary

• The annual inflation rate increased to 7.3% for August 2022 from 3.4% recorded during the same period last year. See figure 1.

• The annual inflation rate continues on an upward trend since May 2022 with the transport category being the main contributor. This emanated from high and volatile international crude oil prices

• 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 clothing and footwear. See figure 2.

• On a monthly basis, inflation increased by 0.3% an increase in the monthly inflation rate was mainly influenced by the price levels of public transportation services as a result of an increase in the bus fares from N$ 10 to N$ 13

Analysis

• The annual inflation rate for the transport category increased to 23.2% from 6.2% recorded during the same period last year. This was mainly influenced by an increase in the prices of fuel (petrol and diesel), increasing by 64% and 68% respectively and high prices parking fees. With Namibia being a dependent economy, high prices for oil in the international market saw Namibia vulnerable to oil demand and supply shocks and this led to skyrocketing fuel prices between August 2021 and August 2022

• An increase in the annual inflation rate for hotels, cafes, and restaurants from 2.9% to 9.3% was driven by an upturn in demand for accommodation services as the sector showed signs of recovery. This was augmented by a rebound in national occupancy rates from 20.1% to 61.2% for August 2022 as tourism normally peaks in the month of August (Hospitality Association of Namibia)

• The annual inflation rate for furnishings household equipment and routine maintenance of the house increased to 8.6% from 2.6%. This was influenced by an increase in the price levels of goods and services for routine household maintenance

• Clothing and footwear recorded an increase in the annual inflation rate of 1.1% from -2.7%. This came as a consequence of an increase in the price levels of dry-cleaning services and repair of footwear

• The health category recorded deflation of -1.8% for August 2022 declining from 3.5% to 1.7%. This resulted from low demand for outpatient, medical, dental, and paramedical services

Figure 1: Annual Inflation rates in Namibia vs. South Africa

Figure 2: Sub-Categorical analysis Year on Year %, Namibia

Figure 3: Sub-Categorical analysis Year on Year % change (August 2021- August 2022), South Africa

Outlook

• Energy prices and the rebalancing of demand back to pre-pandemic levels specifically in the tourism sector have driven up the annual inflation rate. The continuous increase in the inflation rate will compel central banks to continue tightening the monetary policy for price stability thereby suppressing spending patterns
• Although the economy is on a recovery path there remains an upside inflationary outlook risk in the short to medium term. This is evidenced by the continuous rise in the annual inflation rate
• We anticipate that the annual inflation rate for September will remain on an upward trajectory.

Executive summary

• The annual inflation rate increased to 6.8% for July 2022 from 4.0% recorded during the same period last year. See figure 1
• The main drivers of an increase in the annual inflation rate were transport, hotels, cafes and restaurants, clothing and footwear, recreation and culture, alcoholic beverages, and tobacco. See figure 2
• On a monthly basis, inflation increased by 0.8%
• An increase in the monthly inflation rate was mainly influenced by the price levels of fruits specifically avocadoes

Analysis

• The annual inflation rate for the transport category increased to 20.9% from 10.6% recorded during the same period last year. This was mainly influenced by an increase in the prices of fuel and driving lessons, licenses, and tests
• An increase in the annual inflation rate for hotels, cafes, and restaurants from 1.0% to 9.8% was driven by a high uptake for accommodation services as the tourism sector shows positive sentiments
• Clothing and footwear recorded an increase in the annual inflation rate of 0.3% from -3.0%. This came as a consequence of an increase in the price levels of dry-cleaning services and repair of footwear.
• The annual inflation rate for the recreation and culture category increased from 2.1% to 5.1% due to the high demand for package holidays influenced by the  July school holiday
• The annual inflation rate for alcoholic beverages and tobacco increased to 5.4% from 2.5%. This was influenced by an increase in the price levels of white spirits and beer

Figure 1: Annual Inflation rate

Figure 2: Sub-Categorical analysis Year on Year %, Namibia

Outlook

• Higher energy and food prices and the rebalancing of demand back toward the sectors that were negatively impacted by the Covid-19 pandemic have driven up inflation. Persistently high inflation will compel central banks to raise interest rates for price stability, thereby suppressing spending patterns.
• A recent sharp decline in oil prices as a result of a rebound in the international crude oil market which increased crude oil production by major oil producers. This implies that national fuel prices are expected to decline and slow the overall inflation much quicker than initial expectations.

Executive summary

• The annual inflation rate increased to 6.0% from 4.1% recorded during the same period last year. See figure 1
• The main drivers of an increase in the annual inflation rate were transport, hotels, cafes and restaurants, furnishings, household equipment, routine maintenance of the house, alcoholic beverages, and tobacco.
• The main price hikes were recorded for the subcategories of operation of personal transport equipment, package holidays, and goods and services for household routine maintenance. See figure 2

Analysis

• The transport category recorded an increase in the annual inflation rate of 18.6%. This was mainly influenced by an increase in the prices of petrol/diesel and driving lessons, licenses, and tests
• Hotels, cafes, and restaurants recorded an increase in the annual inflation rate of 8.6%. This was driven by a high demand for accommodation services as the tourism sector shows positive developments
• Furnishings, household equipment, and routine maintenance of the house recorded an increase in the annual inflation rate of 7.1% as a consequence of an increase in the price levels of goods and services for routine household maintenance
• The annual inflation rate for alcoholic beverages and tobacco increased to 5.8% as a result of an increase in the price levels of white spirits

Figure 1: Annual Inflation rate

Figure 2: Sub-Categorical analysis Year on Year %, Namibia

Outlook

• The annual inflation rate will remain elevated in the short to medium term due to global uncertainty and the depreciation of the Rand against the USD.

Executive summary

• The annual inflation rate increased to 5.4% from 3.8% recorded during the same period last year. See figure 1
• The main drivers of an increase in the annual inflation rate were transport, hotels, cafes and restaurants, clothing and footwear and furnishings, household equipment, and routine maintenance of the house.
• The main price hikes were recorded for the subcategories of package holidays, public transportation services, and accommodation services. See figure 2
• On a monthly basis, inflation declined by 0.2%, this was mainly influenced by a decline in petrol and diesel prices between April and May 2022.

Analysis

• The transport category recorded an increase in the annual inflation rate of 9.4%. This was mainly influenced by an increase in the prices of public transportation fares and fuel.
• Hotels, cafes, and restaurants recorded an increase in the annual inflation rate of 8% . This was driven by a high demand for accommodation services
• The annual inflation rate for clothing and footwear increased by 3.1% as a result of an increase in the price levels of dry cleaning, repair, and hire of clothing
• Furnishings, household equipment, and routine maintenance of the house recorded an increase in the annual inflation rate of 3%  as a consequence of an increase in the price levels of goods and services for routine household maintenance

Figure 1: Annual Inflation rate

Source: NSA & HEI RESEARCH

Figure 2: Sub-Categorical analysis Year on Year %, Namibia

Source: NSA & HEI RESEARCH

Outlook

• We anticipate that the annual inflation rate will remain elevated in the short to medium term due to continuous external cost-push factors.

Executive summary

• The annual inflation rate for April 2022 increased to (5.6%) the highest recorded since November 2018 up from (3.9%) recorded in April 2021. See figure 1
• The main drivers of an increase in the annual inflation rate were transport, hotels, cafes and restaurants, furnishing, household equipment, maintenance of the house, and education categories. See figure 2
• On a monthly basis, Namibia recorded an inflation rate of 1.4% in April 2022 in relation to 0.5% recorded in March 2022

Analysis

• The transport category recorded an increase in the annual inflation rate from (7.5%) to (18.9%). This resulted from an increase in the operation of personal transport equipment (fuel costs)
• Hotels, cafes, and restaurants recorded an increase in the annual inflation rate from (-0.2%) to (9.3%). This was influenced by an increase in the demand for accommodation services
• Furnishings, household equipment, and routine maintenance of the house recorded an increase in the annual inflation rate from (5.3%) to (7.7%) as a result of an increase in the price levels of goods and services for routine household maintenance
• The annual inflation rate for education increased from (0.8%) to (3.1%) due to an increase in the costs of primary (private) and secondary education

Figure 1: Annual Inflation rate

Source: NSA & HEI RESEARCH

Figure 2: Categorical analysis Year on Year %, Namibia

Source: NSA & HEI RESEARCH

Outlook

Inflation continues to upsurge globally augmented by soaring energy and soft commodities prices. We anticipate that the annual inflation rate for May 2022 to remain elevated in the medium term.

Executive summary

• The annual inflation rate for March 2022 increased to (4.5%), up from (3.1%) recorded in March 2021. See figure 1
• The annual inflation rate for March 2022 remained at 4.5% in relation to February 2022.
• The main drivers of an increase in the annual inflation rate were transport, hotels, cafes and restaurants, furnishing, household equipment, and maintenance of the house categories. See figure 2
• On a monthly basis, Namibia recorded an inflation rate of 0.5% in March 2022 in relation to 0.2% recorded in February 2022

Analysis

• The transport category recorded an increase in the annual inflation rate from (2.4%) to (13.8%). This resulted from an increase in the operation of personal transport equipment (fuel costs)
• Hotels, cafes, and restaurants recorded an increase in the annual inflation rate from (-0.2%) to (8.6%). This was influenced by an increase in the demand for accommodation services at the back of eased travel restrictions
• Furnishings, household equipment, and routine maintenance of the house recorded an increase in the annual inflation rate from (4.1%) to (8.1%) as a result of an increase in the price levels of goods and services for routine household maintenance

Figure 1: Annual Inflation rate

Source: NSA & HEI RESEARCH 

Figure 2: Categorical analysis Year on Year %, Namibia

Source: NSA & HEI RESEARCH 

Outlook

We anticipate that the annual inflation rate will remain elevated in the medium term driven by soft commodities and transport inflation. We project stabilization factors in inflation to come into play over the long term.

Report by Turimuye Uandara

Executive summary

• The annual inflation rate for February 2022 increased to (4.5%), up from (2.7%) recorded for the same period last year. See figure 1
• The main drivers of an increase in the annual inflation rate were transport, hotels, cafes and restaurants, furnishing, household equipment, and maintenance of the house categories. See figure 2
• On a monthly basis, inflation declined by 0.2% this was influenced by health as demand for outpatient services, medical, dental, and paramedical decreased

Analysis

• The transport category recorded an increase in the annual inflation rate from (0.2%) to (13.2%). This was mainly influenced by the operation of personal transport equipment (fuel costs)
• Hotels, cafes, and restaurants recorded an increase in the annual inflation rate from (-0.8%) to (9.0%). This was driven by an increase in the demand for accommodation services
• Furnishings, household equipment, and routine maintenance of the house recorded an increase in the annual inflation rate from (3.5%) to (8.2%) as a consequence of an increase in the price levels of goods and services for routine household maintenance

Outlook

• We anticipate that the annual inflation rate for March 2022 will increase. This will be driven by the transport category due to an increase in fuel prices as announced by the Ministry of Mines and Energy
• Additionally, sin tax  price adjustments will also contribute to a rise in overall inflation

Figure 1: Annual Inflation rate

Figure 2: Categorical analysis Year on Year %, Namibia