Namibia’s inflation hits record high in April

 Namibia’s annual inflation for April 2022 increased by 5.6% compared to 3.9% recorded in April 2021, latest official figures show.

“This was the highest annual percentage change above 5% recorded since December 2018,” NSA CEO and Statistician General Alex Shimuafeni said.

On a monthly basis, the inflation rate increased by 1.4% compared to 0.5% recorded a month earlier.

“Transport; and Food and non-alcoholic beverages continued to be the main drivers of the annual inflation rate contributing 2.7 percentage points and 1.1 percentage points, respectively,” he said.

The Zonal inflation rates for the month of April 2022 revealed that Zone 2 (Khomas) recorded the highest annual inflation rate of 6.3% followed by Zone 3 (Hardap, Omaheke, //Karas, and Erongo) at 5.3% while Zone 1 (Kavango East, Kavango West, Kunene, Ohangwena, Omusati, Oshana, Oshikoto, Otjozondjupa, and Zambezi) recorded the lowest annual percentage rate of 5.1%.

“On a monthly basis, the highest inflation rate of 1.6% was registered in Zone 1 while Zone 2 and Zone 3 recorded monthly inflation rate of 1.3% each,” Shimuafeni said.

Advisory firm IJG said rising food and transport prices remain the primary drivers of the Namibian inflation rate, contributing 67% to the country’s annual rate in April.

“Namibia’s annual inflation rate of 5.6% in April is the highest rate in the last 58 months. The uptick in the rate in April means that the 1.4 percentage point differential between Namibia and South Africa’s inflation rates that have been in place since August last year is now significantly smaller. South Africa’s inflation rate came in just below the SARB’s upper end of the target band at 5.9% in March. With inflationary pressure expected to remain high, the SARB’s MPC is expected to hike rates by 25 bps at its May meeting, leaving the BoN with little choice but to follow in-kind in at its MPC meeting June. IJG inflation model currently forecasts inflation to average between 5.0% and 6.2% in 2022.”

PSG Namibia said although it recently revised its inflation outlook, inflation risks are still skewed to the upside.

“Transport price inflation will likely remain near double digits throughout most of the year, despite the introduction of a temporary three-month reduction in levies imposed on fuel products in May. Additionally, the prices of wheat, maize, seed oils and fertilizers have also surged in the wake of the Russian invasion, which will continue to exert upward pressure on food price inflation.”

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