Surging food prices push Namibian inflation higher

Surging food prices push Namibian inflation higher

Consumers have been paying more for food and non-alcoholic beverages as prices continued the upward trend, owing largely to the high inflation rate in January compared to December 2018.
This observation was made by the Economic Association of Namibia (EAN) in its review of the latest Consumer Price Index (CPI) released by the Namibia Statistics Agency.
The month-to-month inflation rate rose to 5,7% in January 2019, up from 5,2% in December 2018, while food prices increased by 6,1% in January compared to 5,4% in December.
Overall, the annual inflation rate dropped further to 4,7% in January from 5,1% in December and 5,6% in November 2018.
It is, however, 120 basis points higher than in January 2018 (3,6%).
In a media statement released on Sunday, the EAN said this marks the highest inflation rate in almost two years.
The main drivers of the high inflation are price increases for bread and cereals of 8,3% in January after 7,9% in December, and meat prices which rose slightly faster in January (3,6%) than in December (3,5%).
These two categories contribute almost 57% to the total food price inflation.
Food and non-alcoholic beverages bear the second highest weight (16,5%) in the consumption basket, as both alcohol and tobacco products contributed to the increase in the inflation rate from 5,9% to 6,4% for the category "alcohol and tobacco".
The inflation rate for housing, water, electricity, and other services, however, continued to decline, reaching the lowest level since December 2015.
Prices for such services increased by 2,9% in January compared to 3,1% in December 2018 and to 2,7% in December 2015.
Rental payments, according to the EAN, contributed 23,3% to the total inflation rate and 82,1% to the inflation rate for the category "housing etc".
"Prices for rental payments increased by just 2,3%, while prices for the maintenance of dwellings rose by 3,3% in January 2019 up from 2,5% in December," the EAN statement said.
The EAN further warned that prices for basic food commodities will come under pressure in the coming months, as the current economic dry spell continue.
In addition, further price increases for alcoholic beverages and tobacco products can be expected this month with the annual increase in excise duties, the EAN noted.
The EAN further said despite upward price pressure in some categories, inflation is however, expected to remain well within the 3% to 6% band targeted by the South African Reserve Bank.
According to the statement, lower global oil prices contributed further to the lower inflation rate, which could positively impact some sectors.