Standard Bank Namibia expects inflation to remain moderately elevated during the second half of 2026, with housing set to remain the largest contributor to consumer price growth while transport inflation continues to depend on movements in global oil prices and geopolitical developments, according to Helena Mboti, Group Economist at Standard Bank Namibia.
Mboti said although inflationary pressures are expected to ease gradually, the outlook remains vulnerable to renewed increases in international oil prices and the emergence of El Niño weather conditions, which could drive food prices higher.
“Overall, the inflation outlook remains closely linked to global energy markets and developments in the US-Iran conflict. A sustained easing of tensions would help contain fuel and transport costs. However, any re-escalation could push oil prices higher and place renewed upward pressure on transport, food and headline inflation,” Mboti said.
The outlook follows an increase in Namibia’s annual inflation rate to 4.4% in June 2026, up from 4.1% in May and 3.7% in June 2025.
Mboti said the increase was driven primarily by higher transport costs, while housing remained the largest contributor to headline inflation because of its weighting in the consumer price basket.
Transport inflation remained the most volatile component of the basket, rising 12.9% year-on-year despite slowing sharply on a monthly basis to 0.4% from 6.3% in May.
The annual increase reflected higher fuel prices and an 8.7% increase in vehicle licensing fees following Roads Authority tariff adjustments. The monthly moderation followed easing global oil prices, which fell to around US$72 per barrel, while domestic fuel prices remained unchanged during June.
Housing inflation increased to 4.4% from 4.1% a year earlier, supported by higher utility costs, including gas and coal prices, while rental inflation remained stable at 4.7%. Mboti said housing is expected to remain the largest contributor to headline inflation over the remainder of the year.
Core inflation, which excludes more volatile items such as food and energy, edged up to 3.3% in June from 3.1% in May.
According to Mboti, the increase reflected higher prices in recreation, hospitality and other consumer services, signalling a gradual build-up in underlying inflationary pressures, although core inflation remained below the 4.2% recorded a year earlier.
Food inflation remained relatively subdued at 2.5%, compared with 6.4% in June 2025. However, it accelerated from 2.0% in May, driven mainly by higher bread and cereal prices, indicating that food price pressures are beginning to build again.
Mboti cautioned that emerging El Niño conditions could add further upside risk to food inflation in the coming months.
Regionally, the Khomas Region recorded the highest annual inflation rate at 5.8%, reflecting higher public transport costs and greater exposure to imported inflation. Inflation slowed to 3.3% in the northern regions, while the southern regions recorded 4.0%.
