Category: Inflation

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