Category: Inflation

Report by Monika Kristof

Executive summary

• The annual inflation rate for April  2021 increased to 3.9% from 3.1% recorded for the previous month. See Figure 1.
• On a 12 months period April 2021 recorded the highest annual inflation rate.
• The main drivers of the increase in the annual inflation rate were ,transport, alcoholic beverages and tobacco, furnishings, household equipment and routine maintenance of the house, housing, water ,electricity, gas and other fuels, communications and food and non-alcoholic beverages categories .See figure 2
• The hotels and cafes inflation remain in negative territory .

Analysis

• Transport inflation recorded a huge increase from (-0.1%) to (7.5%), this was mainly influenced by second effects of fuel prices.
• Alcoholic beverages and tobacco recorded an increase in the annual inflation rate  from (0.4%) to (4.2%),this was influenced by the high prices of  tobacco.
• Furnishings, household equipment and routine maintenance of the house recorded an increase in the annual inflation rate from (2.2%) to (5.3%) ,this was influenced by an increase in the prices of  carpets and other floor coverings.
• The communications inflation increased from (1.5%) to (3.1%),this is due to continuous demand for data and voice services.
• Food and non-alcoholic beverages inflation increased from (4.2%) to (5.9%),due the rise in meat prices.
• The annual inflation rate for hotels ,cafes and restaurants declined from (1.7% ) to ( -0.2%),as this sector remain under pressure.(see figure 2).

Outlook

• The sudden surge in the annual inflation rate will alert Central Banks and their subsequent monetary policy decisions.
• The increase in the annual inflation rate is driven primarily by  cost-push factors with added pressure on the supply side by the vaccine roll-out.

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %

Report by Monika Kristof

Executive summary

• The annual inflation rate for March  2021 increased to 3.1% from 2.4% recorded for March 2020 (See Figure 1).
• March 2021 recorded the highest annual inflation rate on a 12-month period.
• The main drivers of an increase in the annual inflation rate were, food and non-alcoholic beverages, communications, alcoholic beverages and tobacco, housing, water, electricity, gas and other fuels and furnishings (See figure 2).
• The category of clothing and footwear and hotels, cafes and restaurants recorded  a deflation for two consecutive months.

Analysis

• The annual inflation rate for food and non-alcoholic beverages increased from (2.9%) to (6.6%), this was mainly influenced by high demand for food and an increase in  meat prices especially beef due to supply constraints.
• The annual inflation rate for communications increased from (1.1%) to (3.3%),this was influenced by the high demand for communication services due to the continuing remote working condition.
• Alcoholic beverages and tobacco annual inflation rate increased from (2.0%) to (3.8.%), this was influenced by an increase in sin taxes imposed  by the ministry of finance.
• The annual inflation rate for housing water, electricity, gas and other fuels increased from (-0.3%) to (1.1%),this was due to an increase in the costs of regular maintenance and repair of dwelling.
• The annual inflation rate for hotels, cafes, and restaurants declined from (2.1%) to (-0.2%), this was due by the lack of demand for accommodation services.
• The education category recorded a decrease in the annual inflation rate from (7.6.%) to (0.8%), this was influenced by the decline in the  price levels  of primary (private) and secondary education (ages 7 to 17 years).

Outlook

• Food and non-alcoholic beverages ,housing ,water electricity, gas and other fuels and communications categories  will continue to drive up inflation in the second quarter of 2021.
• We anticipate that the annual inflation rate for April 2021 will increase  but trend around 3 %.

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %

Report by Monika Kristof

Executive summary

• The annual inflation rate for February 2021 stood  at 2.7% up from 2.5% as recorded in February 2020.see Figure 1.
• February 2021 recorded the same annual inflation rate as  January 2021.
• An increase in the annual inflation rate between February  2020 and February  2021 emanated mainly from the categories of Food and non-alcoholic beverages, alcoholic beverages and tobacco, housing ,water electricity gas and other fuels  and communications and health category. See figure 2   
• The category of clothing and footwear and hotels, cafes and restaurants recorded a deflation for February  2021.

Analysis

• The annual inflation rate for food and non-alcoholic beverages increased from (2.8%) to (5.5%) this was mainly influenced by high demand for meat and oils and fats.
• The annual inflation rate for communications increased from (1.4%) to (3.1%), this was influenced by the high demand for communication services due to the continuing remote working condition.
• Alcoholic beverages and tobacco annual inflation rate increased from (2.7%) to (4.2%),this was influenced by an increase in demand for tobacco.
• The annual inflation rate for housing water, electricity, gas and other fuels increased from (-0.5%) to (1.5 %) and  was driven by an increase in the uptake of rental dwellings.
• The annual inflation rate for hotels, cafes, and restaurants declined from (2.7%) to (-0.8%), this was due by the lack of demand for accommodation services.
• Transport category recorded a decline in the annual inflation rate from (4.4%) to (0.2%).
• The education category recorded a decrease in the annual inflation rate from (7.6.%) to (0.8%) on the back of  this was influenced by the decrease in the  price levels of  primary (private) and secondary education (ages 7 to 17 years).

Outlook

• Food and non-alcoholic beverages ,housing ,water electricity, gas and other fuels and communications categories  will continue to be the main drivers of inflation  in the coming months.
• We anticipate that the annual inflation rate for March 2021 will  pick up but it will hover below 3%.

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %

Report by Monika Kristof

Executive summary

• The annual inflation rate for January 2021 stood at (2.7%) up from (2.4%) that was recorded for December 2020.See Figure 1.
• On a monthly basis the monthly inflation rate rose to 0.9% in January 2021 from 0.0 % recorded for the previous month.
• The slight increase in the annual inflation rate between January 2020 and January 2021 emanated mainly from the categories of communications, food and non-alcoholic beverages, alcoholic beverages and tobacco and furnishing, household equipment and routine maintenance of the house. See figure 2   
• The category of clothing and footwear and transport recorded a deflation for January 2021.

Analysis

• The annual inflation rate for food and non-alcoholic beverages increased from (2.2%) to (5.2%) this was mainly influenced by high demand for meat and oils and fats.
• The annual inflation rate for communications increased from (0.7%) to (4.1%), this was influenced by the high demand for communication services due to COVID-19 19 restrictions.
• Alcoholic beverages and tobacco annual inflation rate increased from (2.6%) to (5.0%), this was influenced by the high prices reflected in the category of tobacco.
• The annual inflation rate for housing water, electricity, gas and other fuels increased from (-1.2%) to (1.0 %) this was influenced by an increase in the prices of rental payments for dwelling (both owners and renters) and in the electricity, gas and other fuels prices.
• The annual inflation rate for furnishings, household equipment and routine maintenance of the house increased   from (2.9%) to (4.1%) this was influenced by the price levels of carpets and other floor coverings, glassware, tableware and household utensils.
• The annual inflation rate for hotels, cafes, and restaurants declined from (4.1%) to (0.1%), this was influenced by the lack of demand for Accommodation services.
• Transport category recorded a depressing decline in the annual inflation rate from (5.0%) to (-0.9%), this was due to the lack of demand for car parts.
• The education category recorded a decrease in the annual inflation rate from (5.7%) to (1.8%) this was influenced by the price levels of pre-primary education (ages 2 to 6 years) and tertiary education.

Outlook

• We project that the annual inflation rate for February 2021 will increase but it will remain within the South Africa inflation target of 3% and 6%.

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %

Report by Monika Kristof

Executive summary

• The annual inflation rate for November 2020 declined to 2.2% from 2.5 % that was recorded for November 2019.See figure 1.
• The decline in the annual inflation rate between November 2019 and November 2020 resulted mainly from decreases reflected in the price levels of clothing and footwear, housing, water, electricity, gas and other fuels, transport, education, hotels, cafes, and restaurants categories.
• The categories of food and non-alcoholic beverages, alcoholic beverages and tobacco, furnishings, household equipment and routine maintenance of the house, communications, miscellaneous goods, and services recorded an increase in the annual inflation rate between November 2019 and November 2020.See figure 2.

Analysis

• The decline in the annual inflation rate for clothing and footwear from (1.9% to -6.5 %) was influenced by the decline in the prices of men’s clothing and adult footwear.
• Housing, electricity water, gas and other fuels recorded a decline in the annual inflation rate from (1.9% to -1.3%), this was influenced by the price levels of rental payments for dwelling (both owners and renters), regular maintenance and repair of dwelling and water supply, sewerage service and refuse collection.
• The decline in the annual inflation rate for the transport category from (0.1% to -1.2%) was influenced by the decline in the prices of operation of personal transport equipment and the lack of demand for public transportation services.
• The decline in the annual inflation rate for the education category from (12.0% to 7.0%) was influenced by the decline in the prices of   pre-primary education (ages 2 to 6 years), primary (private) and secondary education (ages 7 to 17 years) and tertiary education category.
• The decline in the annual inflation rate for hotels, cafes, and restaurants category from (3.5% to 0.9%), was influenced by the lack of consumer confidence which led to a lower demand for accommodation services.

Outlook

• December is a holiday season and people tend spend more, this will result in an increase in the overall demand for goods and services, consequently this will increase the overall annual inflation rate. We project that the annual Inflation rate for December 2020, will rise but remain around 2 and 2.5 %.

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year Percentage

Report by Monika Kristof

Executive summary

• The annual inflation rate for December 2020 slowed down to 2.4% from 2.6% that was recorded for December 2019.See Figure 1.
• On average, the annual inflation rate for 2020 stood at 2.2%.
• The deceleration in the annual inflation between December 2019 and December 2020 emanated mainly from the categories of clothing and footwear, housing, water, electricity, gas and other fuels, hotels, cafes and restaurants, transport, education and recreation and culture categories. See figure 2.
• The category of clothing and footwear and housing, water, electricity, gas, and other fuels recorded a deflation throughout the year 2020.
• Despite the slowdown in the annual inflation rate, food and non-alcoholic beverages, alcoholic beverages and tobacco, communications, furnishings, household equipment and routine maintenance of the house and miscellaneous goods and services categories recorded an increase in the annual inflation rate. See figure 2.

Analysis

• The deflation recorded for the clothing and footwear category from (0.5 % to -6.0 %) was mainly influenced by the lack of demand for footwear.
• The decline in the annual inflation rate for the housing, water electricity gas and other fuels category from (1.9% to -1.3 %) was influenced by the decrease in the prices of rental payments for dwelling (both owners and renters), and   in the prices of regular maintenance and repair of dwelling.
• The annual inflation rate for hotels, cafes, and restaurants declined from (4.1% to 0.1%), this was influenced by the lack of demand for Accommodation services.
• Transport category recorded a decline in the annual inflation rate from (2.0% to -1.3%), the slowdown was mainly influenced by the decline in the prices of car parts for personal transport and by the lack of demand for public transportation services.
• The decline in the annual inflation rate for the education category from (12.0% to 7.0%) was mainly due to price declines in the pre-primary education (ages 2 to 6 years) and tertiary education categories.

Outlook

• As the Covid-19 second wave hits, the stagnation in economic activities is expected to continue and the loss of incomes due to retrenchments and the closure of some businesses will lead to a lack of demand for goods and services and consequently cause a decline in the inflation rate.
• We project that the annual inflation rate for 2021 will remain within the South Africa inflation target of 3% and 6%.

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %

Executive summary

• The Annual inflation rate for October 2020 stood at 2.3% down from 3.0% that was recorded for October 2019.See figure 1
• The decline in the annual inflation rate was driven by the decline in the price levels of clothing and footwear, housing, water, electricity, gas and other fuels, transport, hotels, cafes and restaurants and health categories.
• Food and non-alcoholic beverages recorded the highest annual inflation rate for October 2020.See figure 1.

Analysis

• The decline in the annual inflation rate for clothing and footwear from (0.9% to -6.1%), was influenced by low demand due to a drop in consumer confidence, caused by losses of disposable incomes which emanated from retrenchments.
• The category of Housing, water, electricity, gas, and other fuels recorded a decline in the annual inflation rate from (1.9% to -1.3%), this was influenced by slow demand in rental payments for dwelling both owners and renters.
• The annual inflation rate for transport declined from (1.5% to -1.2%), this was influenced by the decline in the price levels of spare parts, accessories, and lubricants for households.
• The annual inflation rate for education declined from (12.0% to 7.0%), this was influenced by the decline in the price levels of pre-primary and primary, secondary, and tertiary education.
• The annual inflation rate for hotels, cafes and restaurants declined from (2.8% to 0.8%), the decline was influenced by a weak demand for accommodation services.
• The annual inflation rate for the category of food and non-alcoholic beverages recorded a robust growth from (4.0% to 7.1%), this was influenced by the increase in the prices of meat, oils, and fats. See figure 2.

Outlook

• The lack of demand due to low consumer confidence in purchasing goods and services continues to negatively influence Namibia’s inflation rate, we anticipate that the inflation rate for November 2020 will remain subdue.

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %

Report by Monika Kristof