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Annual Inflation Up To 6.3% In May

By:Staff writer
Namibia’s annual inflation has gone up to 6.3% in May compared to the 5.6% recorded the month before and the 5.4% seen in May 2022.
According to the Namibia Statistics Agency (NSA), food and non-alcoholic beverages were the biggest contributors, as well as alcoholic beverages and tobacco.
Food and non-alcoholic beverages increased by 12.5% and contributed 2.4% points to the overall Consumer Price Index annual rate.
This represents a 352% increase for food and non-alcoholic beverages, which had the fastest growth since January 2002, increasing by at least 1.4% points every month and 16.4 percentage points every year approximately.
According to the analysis for May, those in Khomas region pay more for food than those in the rest of the country.
Analysis of the average retail prices of selected products for the month of May 2023 revealed that consumers in Zone 2 (Khomas) paid the highest price for pure 750 mlsunflower at N$36.86 followed by Zone 1 (Kavango East, Kavango West, Kunene, Ohangwena, Omusati, Oshana, Oshikoto, Otjozondjupa, and Zambezi) at N$35.38, while consumers in Zone 3, ||Kharas, Erongo, Hardap, Omaheke) paid the lowest price of N$34.42.
For brown bread (standard loaf), consumers in Zone 3 paid the lowest price at N$13.24 while the highest price was paid by consumers residing in Zone 2 at N$14.33.
Bread and cereals are still the most purchased food items, having a weight of 4.8% followed by meat (3.5%); Sugar, jam, honey, syrups, chocolate, and confectionery (1.4%); Vegetables; and Milk, cheese, and eggs (1.2%) each.
“The price levels of Fruit went up to 22.1 percent during May 2023 compared to 16.5 percent recorded during the same period a year earlier. The increase was reflected mainly in the price levels of Watermelons (from -7.8% to 22.1%); Citrus fruits (from 9.1% to 31.3%); and Pears (from 5.7% to 12.5%),”NSA Statistician-General and CEO, Alex Shimuafeni said.
Meanwhile, the experts at Simonis Storm Securities have noted that slowdown in manufactured food price inflation in South Africa, particularly in meat and grain mill products, along with the contraction in oils and fats prices, could lower Namibian food inflation as most of our food imports come from South Africa.
However, they argue that the weaker exchange rate poses an upside risk, potentially offsetting some of the benefits of reduced food inflation. The interplay of these factors will determine the overall impact on Namibian inflation in the coming months.
They further observed that while the contribution of electricity inflation to overall headline inflation has been lower than the weight (28.36%) it carries in the consumer basket, with the 9.0% increase in electricity tariffs, the contribution of this category can increase in the second half of 2023.
Last month, the Electricity Control Board (ECB) announced an approved average bulk tariff increase of 8.97% for the financial period 2023/2024.
Bulk tariff purchases will increase from the current N$1.82 to N$1.98 per kilowatt hour, said Robert Kahimise, the ECB Chief Executive,
Housing, water, electricity, gas, and other fuels and Transport each contributed 0.7 percentage points to the overall inflation for the month of May.

Staff Writer

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