Namibia’s inflation rate slows in August

Namibia has recorded the slowest inflation rate since November 2021, with main contributors being food and non-alcoholic beverages, housing and utilities, and transport.

According to an analysis by economists from Simonis Storm Securities released on Wednesday, on a month-to-month basis, inflation increased by 0,3% in August 2024, up from 0,2% in July 2024.

The analysts said core inflation, which excludes the most volatile items such as food and energy, eased slightly to 3,8% y/y in August 2024, down from 3,9% y/y in July 2024.

“Goods inflation remained the dominant contributor to overall inflation, standing at 5,1% y/y in August 2024. This, however, reflects a deceleration compared to both the previous month as well as the same period in 2023, indicating a moderation in goods price increases,” said the analysts.

They said food and non-alcoholic beverages registered an inflation rate of 5,2% y/y in August 2024, marking its second consecutive month of increase but still remaining significantly below the 10,0% y/y recorded during the same period in 2023.

“This increase was largely driven by price hikes in breads and cereals, as well as oils and fats categories.

“Additionally, fish prices saw a sharp deceleration, with inflation at just 0,1% y/y in August 2024 compared to 16,2% y/y in August 2023,” the analysts said, adding that the slowdown was driven by an increase in prices for dried, smoked, or salted fish and seafood and fresh, chilled, and frozen fish.

Meat prices, particularly for poultry and pig meat, declined, while sugar prices fell due to improved production forecasts, although concerns over fires in Brazil partially offset the decline.

“Looking ahead, we anticipate further easing of inflation, primarily driven by fuel price cuts resulting from the decline in global oil prices,” said the analysts.

They based their outlook on Brent crude price falling below US$70 per barrel as of 10 September, marking the first time it has reached this level since late 2021.