Namibia: Inflation edges up due to food and transport costs
Namibia’s annual inflation rate stood at 6,0% year on year (y/y) in October, increasing from the 5,4% y/y rate recorded in September.
According to Simonis Storm Securities economic analyst Halleluya Ndimulunde, this marks the third consecutive increase since the 4,5% y/y deceleration observed in July.
The monthly inflation rate for October remained stable, with the same rate as the 0,8% month on month (m/m) increase reported in September, the analyst says.
“While the category of food and non-alcoholic beverages continues to be the primary contributor to headline inflation, the transport category took the lead,” the analyst says.
The food and non-alcoholic beverages category, which accounts for 16,5% of the Namibia Consumer Price Index basket, saw an annual inflation rate of 9,4% y/y in October, an increase from the 9,1% y/y recorded in October 2022, but a slowdown from 9,8% y/y recorded the previous month.
“The food subcategory saw an inflation rate of 9,2% y/y in October, with fish prices increasing by 15,5% y/y, while milk, cheese and eggs rose by 12,4% y/y,” Simonis says.
Vegetable prices experienced a notable increase, rising by 15,4% y/y.
Potatoes, in particular, saw a significant surge of 40% y/y, compared to the 1,4% y/y recorded in October 2022.
This rise can be attributed to Namibia’s heavy reliance on imported potatoes,which has driven up the cost of this produce.
Namibia imports approximately 4 000 tonnes of potatoes per month due to challenges faced by local potato production, especially during the hot summer months when cultivation is difficult.
As a result, during October 2023, the borders were fully opened for potato imports, allowing traders to bring in 90% of potatoes, primarily from South Africa.
The annual inflation rate for the transport category in October 2023 stood at 6,6% y/y, representing a significant slowdown from the 17,8% y/y recorded in October 2022, but an increase from the 2,2% y/y recorded in September 2023.
This increase is primarily attributed to the operation of the personal transport category, which stood at 7,5% y/y in October 2023.
This marks a noteworthy deceleration from the 26,8% y/y recorded in October 2022, but is an increase from the 0,1% y/y recorded last month.
The surge in the inflation rate for the category can be attributed to the rise in petrol and diesel prices.
Petrol prices increased by 190 cents, reaching N$22,88 per litre, while diesel prices increased by 240 cents to N$23,15 per litre during October 2023.
The annual inflation rate for alcoholic beverages and tobacco stood at 7,7% y/y in October 2023, marking an increase from the 6,7% y/y recorded in October 2022.
This increase was observed across all subcomponents within this category.
The main driver of higher inflation for alcoholic beverages can be attributed to the increased prices of sparkling wines/champagnes, transitioning from -0,4% y/y in October 2022 to 11,1% y/y in October 2023.
The housing, water, electricity and gas category registered an increase of 3,3% y/y in October 2023 from 2,3% y/y reported in October 2022.
The increase in the annual inflation rate for this category was mainly reflected in the subgroup of electricity, gas, and other fuels.
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