Namibia’s annual inflation recorded a noteworthy moderation, settling at 5.3% year-on-year (y/y) in December 2023, latest data reveals.
The 5.3% marked a deceleration from the 5.7% recorded in November 2023 and a more substantial drop from the 6.9% recorded in December 2022.
According to Namibia’s Consumer Price Index (NCPI) by the Namibia Statistics Agency, the decline is attributed to the transport category dropping to 4.0% in December 2023, down from a substantial 14.8% observed in December 2022.
Similarly, the food and non-alcoholic beverages category saw its inflation rate slowing to 7.4% in December 2023, compared to 11.8% in the comparative period.
Meanwhile, the hotels and restaurants sector also contributed to the trend, with its inflation rate slowing to 6.5% in December 2023 from 11.7% in December 2022.
Furthermore, the furnishing and household equipment sector recorded a deceleration in its inflation rate to 5.1% in December 2023, down from 10.6% in December 2022.
According to Simonis Storm Securities, the monthly inflation rate in December 2023 experienced a deflation of 0.1% m/m, a shift from the 0.3% m/m inflation noted in November 2023.
“This instance of deflation was the first observed since the 0.2% m/m deflation recorded in August 2021. Across the entirety of 2023, the 12-month annual average inflation rate was 5.9%, reflecting a modest slowdown from the 6.1% documented in 2022,” the firm noted.
The research firm projects that given the observed data and current economic indicators inflation rates will continue to show a downward trajectory in the forthcoming year.
For the fiscal year 2024, Simonis forecasts an average inflation rate of approximately 4.9%, underpinned by the expectation of persistently lower petrol and food prices, coupled with a stable Rand, especially in the first quarter of 2024.
“These factors are anticipated to be key drivers in moderating headline inflation in Namibia. Furthermore, we expect that global economic trends, particularly in the energy and food sectors, will continue to exert significant influence on local inflation dynamics,” the firm reported.
This comes as regional breakdown reveals that in December 2023, Zone 1, encompassing the northern region, reported a y/y inflation rate of 5.9%, surpassing the national headline figure.
Meanwhile, Zone 2, representing the Khomas region, recorded an annual inflation rate of 5% y/y.
Similarly, Zone 3, which includes the Hardap, ||Karas, Omaheke, and Erongo regions saw its annual inflation rate settle at 4.9% y/y, both below the national headline inflation rate.
