Inflation rises to 15-month high in January
Headline inflation rose to 2.7% in January 2021, recording the highest level since October 2019 from 2.4% in December 2020, according to the latest data from the Namibian Statistics Agency.
The food non alcoholic beverages sub index was the biggest positive contributor to the headline inflation rate, followed by alcoholic beverages tobacco and housing utilities. The only negative contributors were clothing, footwear and transport.
Last year consumer price index inflation dipped to a record low of 2.2% amid falling oil prices and limited pass through from the weaker currency, with retailers unable to pass on higher costs in the recession hit trading environment.
PSG Namibia Research Analyst, Shelly Louw said although they forecast the average Namibian dollar to strengthen to N$15.3 in 2021 from N$16.5 in 2020 the consumer price index is set to face some upward pressure from rising global food and oil prices this year, especially in the first half of 2021.
“We expect the World Bank’s food price index for emerging countries to increase by 12.5% in the first half, while we project the Brent crude oil price to rise by 38.2% during the same period. These sharp increases are partly due to base effects as both global food and oil price slumped in second quarter of 2020 during the worst of the ‘Great Lockdown’.
PSG forecast Namibian inflation to accelerate to 4.1 in 2021.
