Executive summary
- The annual inflation rate for March 2023 increased to 7.2%, up from 4.5% recorded for the same period last year. (Figure 1)
- The drivers of an increase in the annual inflation rate were the food & non-alcoholic beverages, alcoholic beverages & tobacco, and miscellaneous goods & services categories. (Figure 2)
- On a monthly basis, Namibia recorded an inflation rate of 0.6% in March 2023 compared to 0.4% recorded in February 2023
Analysis
- Food and non-alcoholic beverages category which accounts for 16.5% of the NCPI basket annual inflation increased to 14.6% during the month of March 2023 compared to 4.6% recorded during March 2022. The increase in the food and non-alcoholic beverages component was mainly driven by an increase in the price levels of fruit, bread & cereal, and sugar, jam, honey, syrups, chocolate & confectionery accounting for 29.1%, 20.8%, and 14% respectively
- The alcoholic beverages and tobacco category which accounts for 12.6% of the NCPI basket annual inflation increased to 6.9% from 4.1% recorded during the same period last year. This was mainly influenced by an increase in the price of white spirits alcoholic beverages and an increase in the price level of cigarettes as a result of an increase in sin tax
- The annual inflation rate for the miscellaneous goods and services category which accounts for 5.4% of the consumer basket increased by 7.3% during the month of March 2023 compared to 1.1% recorded during March 2022. The miscellaneous goods and services were driven by the high demand for insurance.
Figure 1: Annual Inflation Rate (March 2022 – March 2023)
Figure 2: Sub-Categorical analysis (%) change Year on Year and Month on Month
Figure 3: % changes of the main commodities that drove the annual inflation rate, (March 2023 compared with March 2022)
Outlook
- We project that the prices for paraffin will remain elevated, especially for households that are not linked to the grid because the winter season is approaching. The season requires a high use of energy and hence this will lead to an increase in the demand for energy
- Global food prices were set to stabilize for the year 2023 due to increased global supply and record production in India. Namibia’s largest grain-processing company Namib Mills confirmed a decrease in pasta polana, king pasta, rice, and polana instant noodles from 17 April 2023.
- Rice will see a decrease in the price of between 5% and 6%, pasta polana and king pasta between 9% and 11%, and polana instant noodles will go down by 15%
- As such we anticipate food prices to moderate for the month of April 2023.