Namibia’s inflation rate fell to 4.4% in August 2024, marking the lowest level since November 2021, recent data from Cirrus shows.
The significant drop in inflation is attributed to several factors, including decreases in fuel prices, a strengthening US Dollar, and a base effect from the previous year.
The recent trend of declining oil prices and a stronger exchange rate have contributed to this downward shift, signalling a period of easing inflationary pressures in the country.
“Further decelerations in the coming months are expected due to fuel price decreases in September and a base effect from the previous year, with current market conditions also showing rapidly declining oil prices and a strengthening USD-NAD exchange rate,” a release by Cirrus said.
Similarly, according to the Namibian Statistics Agency (NSA) Consumer Price Index, month-on-month inflation increased marginally by 0.3%, up from 0.2% in the previous month.
Regionally, Zone 2 (Khomas region) experienced the highest inflation at 5.4%, while northern and southern coastal regions saw lower rates of 3.9%.
“The analysis of the average retail prices of selected products for August 2024 revealed that consumers in Zone 1 paid the highest price for Bananas (1Kg) at N$31.56, followed by Zone 3 consumers at N$31.38, while consumers in Zone 2 paid the lowest price at N$29.21,” the report read.
Moreover, the fish category saw a dramatic reduction in its annual inflation rate, dropping from 16.2% in August 2023 to just 0.1% in August 2024.
Within the food sub-component, bread, and cereals accounted for the highest weight of food items that consumers purchased, with a weight of (4.8%), followed by meat (3.5%); sugar, jam, honey, syrups, chocolate, and confectionery (1.4%); vegetables and milk, cheese, and eggs at (1.2%) each.
Food and non-alcoholic beverages, which account for 16.5% of the consumer basket, registered an annual inflation rate of 5.2%, down from 10.0% the previous year. This is a positive development, contributing to the overall slowdown in headline inflation.
In contrast, categories such as transport saw significant inflation increases, with personal transport equipment (petrol and diesel) rising sharply from a deflation of -13.1% in 2023 to 12.5% in 2024.
“On a monthly basis, the inflation rate for this category increased by 0.0 percent in August 2024, compared to a decline of 1.0 percent witnessed a month ago,” the report reads.
Furthermore, the annual inflation rate for the alcoholic beverages and tobacco category, which accounted for 12.6% of the consumer basket, was observed at 4.6% during the period under review compared to 7.9% registered a year ago.
Month-on-month, the inflation rate for this category witnessed a slow increase of 0.3% compared to 0.7% recorded a month earlier.
Meanwhile, the annual inflation rate for goods stood at 5.1% in August 2024 compared to 5.8% witnessed a year ago, while the annual inflation rate for services stood at 3.4% compared to 3.1% registered in the same period last year.
Core inflation, which excludes volatile items like food and energy, remained stable at 3.8%, highlighting more controlled underlying price pressures in the economy. However, headline inflation continues to be influenced by fluctuations in the volatile food and energy sectors.
