Slower inflation in housing, alcoholic beverages and tobacco stabilizes headline inflation
The Namibian Statistics Agency (NSA) released the inflation numbers for February 2019, showing a 4.4% decrease in February, down from the 4.7% recorded in January.
The main drivers behind the decrease in February’s headline inflation rate were lower housing & utilities and alcoholic beverage & tobacco price inflation.
Moreover, unchanged fuel prices in February also helped to contain transport price inflation. Fuel prices also remained unchanged in March and analysts believe that even though fuel prices for March 2019 remained unchanged, there is expectation for an increase in fuel levies at the upcoming budget tabling.
“Crude is expected to bridge $70 per barrel towards the end of 2019, which will pose inflationary pressure for the transport category,” Simonis Storms Securities said.
Meanwhile, food inflation rose by 5.9% in February compared to a 2% in the prior year. Simonis Storms stated that the rising concern around food security in Namibia coupled with the drought situation will lead to an increase in food prices by producers, which will heighten the pressure already felt by the consumer.
Inflation for 2019 is expected to average 5.4%.