Inflation slows down … as EAN anticipates a November pick-up
The annual inflation rate for October 2017 stood at 5.2 percent compared to 7.3 percent registered in October 2016.
On a monthly basis, inflation stood at 0.1 percent.
For the month of October 2017, the major drivers of the annual inflation rate were housing, water, electricity, gas and other fuels (8.6 percent), education (7.8 percent), hotels, cafes and restaurants (6.9 percent) and Health (5.8 percent).
The food and non-alcoholic beverages category is a key driver of inflation in Namibia due to the fact that it tends to be fairly volatile and it represents a large weight in the overall NCPI basket.
As of October 2017, the category’s annual inflation stood at (3.7 percent) compared to (11.7 percent) recorded in October 2016, a decrease of 8.0 percentage points.
The decrease in food price levels were recorded in all the sub-groups comprising the food component except meat which increased to 9.2 percent from 5.3 percent registered during October 2016.
The monthly inflation rate for this category slowed to 0.1 percent as compared to 0.5 percent registered in the previous month.
For the month of October 2017, the annual inflation rate for the alcoholic beverages and tobacco component stood at 5.7 percent as compared to 6.0 percent registered in October of the preceding year, resulting in a slow down of 0.3 percentage points.
This movement emanated from a decrease in the price levels of the alcoholic beverages subcomponent of the group.
The monthly inflation rate for this group stood at 1.0 percent, compared to 0.6 percent recorded a month earlier.
The annual transport inflation rate, which represents 14.28 percent of the overall basket weights rose to 4.4 percent in October 2017 from 3.6 percent when compared to the same period of 2016.
On a monthly basis, the inflation rate for transport stood at 0.6 percent compared to 0.7 percent recorded a month earlier, resulting in a slight decrease of 0.1 percentage points.
This month-on-month slight decline was driven by decreases in the subgroup of operation of personal transport equipment which decreased from 1.0 percent obtained a month earlier to 0.04 percent in October 2017.
Economic Association of Namibia (EAN) director Klaus Schade said, “Overall, the current trend of the inflation rate supports our view that this year’s annual inflation rate will remain below last year’s inflation rate of 6.7 percent.”
He added that consumers continue to benefit from lower prices for basic food items such as bread and cereals and relatively modest increases for food items in general.
“However, inflation is expected to pick up for November due to the increase in fuel prices by NAD0.40 per litre for petrol and NAD0.60 per litre for diesel. Since transport accounts for the third largest category in the consumption basket (14.3%), any price increases within this category influences the overall inflation rate,” he said.