Inflation expected to drop

Windhoek – Namibian inflation is most likely to drop to 3.2 percent during the month of April, from the 3.6 percent recorded in February, according to the National Statistics Agency’s (NSA) predictions of last week.

NSA’s forecasts are in line with the Bank of Namibia’s predictions that the annual inflation rates are to slow down mainly due to decline in international oil prices, which have had a bearing on the costs of transport, housing, water, electricity, gas and more.

The NSA maintain in their update that inflation would pick up slightly during the second half of this year and food and transport inflation are to normalise, while a tick up in electricity and water prices will impact the numbers.

The overall inflation figure stood at 3.4 percent but went up during February to 3.6 percent as prices went up by 0.5 consumer index points from 110.4 to 110.9 while alcoholic beverages prices increased by 1.6 percent on a monthly basis.

According to the data released, inflation on food and non-alcoholic beverages weighed 5.5 percent of the consumer basket, within the major groups comprising the Namibia Consumer Price Index (CPI), while housing, water, electricity, gas and other fuels weighed up 2.9 percent.

Alcoholic beverages and tobacco recorded an 8.6 percent increase whereas transport decreased by -3.7 percent on the CPI.

A consumer price index (CPI) measures changes in the price level of a market basket of consumer goods and services purchased by households.

According to NSA, the index on food and non-alcoholic beverages increased from 115.3 to 116.1 during February, which represents a monthly increase of 0.7 percent and a yearly growth of 5.5 percent.

“We anticipate that prices in the (consumer) basket will remain volatile over the few months. The meat prices will decline as livestock marketing continues due to a poorer rainy season,” reads the NSA assessment.

The highest weight of 28.4 percent in the consumer basket, is recorded in the housing, water, electricity, gas and other fuels category.

 “On a monthly basis the index seems to have stagnated with no apparent movements within the index. The index should reflect the increase in rental incomes that consumers have had to spend during the course of the year.”

Annual inflation numbers in alcoholic beverages and tobacco category stood at 8.58% but as adjustments for Sin taxes take place, NAS anticipates that this category will reflect the rising cost of liquor.

April 2015
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