Alcoholic beverages, tobacco and hospitality industry as well as a less deflationary trend in transport inflation are now Namibia’s primary drivers of headline inflation, official figures reveal.
Headline inflation in August 2023 showed a marginal increase, ticking up to 4.7% year-on-year from 4.5% in July 2023.
While the increase is noteworthy, it remains significantly slower than the 7.3% recorded in August 2022, signalling some respite for consumers.
Cirrus Capital’s Head of Research, Robert McGregor, said the evolving composition of inflation drivers reflects a changing economic environment.
“One of the standout trends in recent months has been the consistent deceleration of annual inflation in the food and non-alcoholic beverages category. This decline has persisted for six consecutive months, reflecting greater stability in essential goods pricing,” said McGregor.
However, he added that the transport sector witnessed a less deflationary trend, with inflation easing from -2.5% in July 2023 to -2.2% in August 2023, indicating a potential shift in the cost dynamics of mobility.
McGregor hinted that the real intrigue lies in the sectors where inflation is accelerating.
“Alcoholic beverages and tobacco, clothing and footwear, housing and utilities, health, communications, and hotels, restaurants, and cafes have all experienced an uptick in inflation rates,” he said.
This expansion in price pressures across various sectors further hints at a broader shift in consumer spending patterns and economic dynamics.
Monthly inflation surged to 0.4% from the previous month’s 0.3%, marking the highest level of monthly inflation since March 2023, suggesting that the changes in inflation drivers are gradually manifesting in consumer budgets.
“Divisions with the highest inflation rate during August 2023 were food and non-alcoholic beverages (10.0%); recreation and culture (9.7%); alcoholic beverages and tobacco (7.9%); hotels, cafés and restaurants (7.8%); furnishings, household equipment and routine maintenance of the house (6.6%); and miscellaneous goods and services (5.5%),” said NSA Statistician-General & CEO Alex Shimuafeni
Food and non-alcoholic beverages, which account for 16.5% of the NCPI basket, registered an annual inflation rate of 10.0% during August 2023, compared to 8.8% registered during the corresponding period of 2022.
“On a monthly basis, the inflation rate for this category stood at 0.3% during August 2023 compared to -0.2 % recorded during the preceding month,” Shimuafeni said.
The year-on-year inflation rate for alcoholic beverages and tobacco stood at 7.9% in August 2023 compared to 5.2% registered in August of the preceding year.
Shimuafeni noted that the increase in the annual inflation rate for this category resulted from an increase witnessed in the subcategory of alcoholic beverages which registered an increase of 8.4% compared to 5.4% in August 2022.
Meanwhile, the month-on-month inflation rate for this category increased by 0.5% compared to 1.1% registered a month earlier.
At the Zonal level for the month of August 2023, Zone 1 (Kavango East, Kavango West, Kunene, Ohangwena, Omusati, Oshana, Oshikoto, Otjozondjupa, and Zambezi regions) exhibited the highest annual inflation rates of 5.3%.
This is closely followed by Zone 2 (Khomas region) with an annual inflation rate of 4.5% while Zone 3 (//Kharas, Erongo, Hardap, and Omaheke regions) recorded the least annual inflation rate of 4.0%.
