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Inflation shoots out, breaking the 4% level, monthly year on year

Inflation shoots out, breaking the 4% level, monthly year on year

Headline inflation has broken out to the upside, breaching the 4% year on year level, in the latest inflation index for annual and monthly inflation. Annual inflation for July 2018 compared to July 2017, now stands at 4.5%, consistently rising since April this year.

Monthly inflation from June 2018 to July 2018, has more than doubled, effectively growing by a factor of 2.5 .

Although the Statistician General, Mr Alex Shimuafeni tried to downplay the shocking inflation figures by reminding users of statistics that the year on year monthly growth is still less than the same month a year ago, he failed to notice that headline inflation has now manifested a clear trend since April, and that trend is up. However, month on month inflation is the real shocker, jumping from 0.2% to 0.5%. That is a 150% acceleration.

July headline inflation, i.e. inflation including fuel and food, has shot up to 4.5% from 4% in June. It is still less than a year ago when July 2017 inflation measured 5.4%, a slowdown of 0.9 percentage points, as Mr Shimuafeni pointed out

The reason why this year’s July inflation is lower than last year’s is because of a decrease of 5% in the prices of Clothing & Footwear, slower growth of 3.7% in the prices of Housing, Water, Electricity, Gas and Other Fuels (9.1% in July 2017), slower growth of 0.6% in the prices of Furnishings, Household Equipment and Routine Maintenance (4.1% in July 2017), slower growth of 0.3% in the prices of Communication (3.5% in July 2017), and finally, slower growth of 3.1% in the prices of Recreation & Culture (4.9% in July 2017).

The twelve-month average annual and average monthly inflation rate for the period August 2017 to July 2018 stood at 4.4% and 0.4% respectively, while the 2018 year-to-date average is estimated at 3.8%.


 

About The Author

Daniel Steinmann

Brief CV of Daniel Steinmann. Born 24 February 1961, Johannesburg. Educated at the University of Pretoria: BA, BA(hons), BD. Postgraduate degrees are in Philosophy and Divinity. Editor of the Namibia Economist since 1991. Daniel Steinmann has steered the Economist as editor for the past 29 years. The newspaper started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at www.economist.com.na. His editorial focus is on economic analysis based on budget analysis, disecting strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He was a founding member of the Editors' Forum of Namibia. Over the years, he has mentored scores of journalism students as interns and as young professional journalists. He often assists economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. He is frequently consulted by NGOs and international analysts on local economic trends and developments. Send comments to daniel@economist.com.na