Fuel prices were, on average, 13.2% lower year on year in October 2024 compared to October 2023, data from IJG Securities shows.
The firm said this decline resulted in the transport category exerting a deflationary impact of -0.47 percentage points on overall inflation for the month.
“A similar disinflationary effect is expected for November, as fuel prices remain 13.2% lower on average compared to the previous year. With fuel prices continuing to exert a disinflationary effect, CPI is likely to remain subdued in the near term,” said IJG in its CPI report for October.
This comes as Namibia’s annual inflation rate eased to 3.0% y/y in October, driven by slower price increases in several major categories and a deflationary impact from fuel prices. However, persistent inflationary pressures remain in housing, utilities, and food.
“Housing and utilities, the largest basket item in weighting, accounted for 1.08 percentage points of the total annual inflation figure. Food and non-alcoholic beverages added 1.01 percentage points, followed by alcohol and tobacco, which contributed 0.66 percentage points,” said IJG.
The recreation and furnishings basket categories contributed 0.17 and 0.14 percentage points, respectively, in October.
Key risks include potential increases in food and utility costs, which could offset further gains from declining transport prices.
“IJG’s inflation model is currently forecasting the annual Namibian inflation rate to average between 4.2% and 4.3% in 2024, with our base case being 4.2%,” said IJG.
The alcohol and tobacco category posted inflation of 1.0% m/m and 4.8% y/y in October, accelerating from the 4.0% y/y observed in September 2024. Tobacco prices increased by 6.4% y/y, while alcoholic beverage prices rose by 4.4% y/y.
Meanwhile, prices in the food and non-alcoholic beverages category rose by 5.1% y/y, consistent with the 5.1% y/y recorded in September.
“Most of the sub-categories of food and non-alcoholic beverages showed monthly increases, while six of the sub-categories showed monthly decreases. The largest annual increases were in fruit prices, which surged by 16.3% y/y, and coffee, tea and cocoa prices, which rose by 9.6% y/y,” said the firm.
Price inflation for the housing and utilities category came in at 1.0% m/m and 4.4% y/y.
Similarly, annual inflation for rental payments rose by 4.2%, marking the fourth change in rental inflation figures this year, despite typically adjusting only once annually.
“The regular maintenance and repair of dwellings sub-category saw a price increase of 2.7% y/y, up from 1.4% y/y in the previous month. Water supply and sewage services recorded an annual price increase of 4.8% y/y, the highest rate since July 2022,” noted the firm.
