Report by Turimuye Uandara
Executive summary
- The annual inflation rate for December 2021 increased to (4.5%), up from (2.4%) recorded for the same period last year. See figure 1
- The main drivers of an increase in the annual inflation rate were transport, clothing and footwear, housing, water, electricity, gas, and other fuels, hotels, cafes and restaurants, miscellaneous goods and services categories. See figure 2
- On a monthly basis, Namibia recorded an inflation rate of 0.4% in December 2021 when compared to 0.6% in November 2021
- The main contributors to the monthly inflation rate recorded in December 2021 were mainly transport, alcoholic and beverage tobacco, and hotels, cafes, and restaurants
- Overall, the average annual inflation rate for the year 2021 rose by 3.6% when compared to 2.2% recorded for the year 2020, driven mainly by the transport inflation
Analysis
- The transport category recorded an increase in the annual inflation rate from (-1.3%) to (14.3%). This was mainly influenced by high prices for vehicle-related goods (car parts and high fuel prices) which led to an increase in transport fares
- The annual inflation rate for clothing and footwear increased from (-6.0%) to (-2.1%) as a result of an increase in the price levels of footwear, adult footwear, and dry cleaning, repair, and hire clothing
- The annual inflation rate for housing, water, electricity, gas, and other fuels increased from (-1.3%) to (1.2%) as a consequence of an increase in the costs of regular maintenance and repair of dwellings
- Hotels, cafes, and restaurants recorded an increase in the annual inflation rate from (0.1%) to (1.9%) due to an increase in the demand for accommodation services
- The annual inflation rate for miscellaneous goods and services increased from (5.6%) to (6.9%). This was driven by a high demand for financial services
Outlook
- The persisting supply chain troubles on the emergence of the omicron variant virus especially in the advanced economies threaten to prolong the increase in prices of goods and services into 2022.
- The general inflation will remain elevated in the short to medium term which could bring an end to the accommodative monetary policy in the global economy.
Figure 1: Annual Inflation rate
Figure 2: Categorical analysis Year on Year %, Namibia
