Staff Reporter
IN August 2022, the annual inflation rate increased by 7.3 % compared to 3.4 % recorded in August 2021.
On a monthly basis, the inflation rate changed by 0.3 % compared to 1.0 % a month earlier.
The jump in the inflation is accorded to the Transport and Food and non-alcoholic beverages components, which continued to be the main contributors to the annual inflation rate with a contribution of 3.3% and 1.6% respectively.
The Zonal inflation rates for the month of August 2022 revealed that, Zone 2 (Khomas) recorded the highest annual inflation rate of 7.9%, followed by Zone 3 (Hardap, Omaheke, //Kharas, and Erongo) at 7.2 % and Zone 1 (Kavango East, Kavango West, Kunene, Ohangwena, Omusati, Oshana, Oshikoto, Otjozondjupa, and Zambezi) which recorded an annual inflation rate of 6.8%.
On a monthly basis, Zone 1 and Zone 3 recorded an inflation rate of 0.4 %each, while Zone 1 recorded the monthly inflation rate of 0.1 %.
Analysis of the average retail prices of selected products for the month of August 2022 revealed that consumers in Zone 2 paid the highest price for white bread (each) at N$12.87, followed by Zone 1 at N$12.12, while consumers in Zone 3 paid the lowest price of N$12.07. For Pure sunflower oil (750ml), consumers in Zone 1 paid the lowest price at N$40.42, while the highest price was paid by consumers residing in Zone 2 at N$41.74.
Economic analyst from Simonis Storm Securities, Theo Klein, commenting on the statistics, noted that this is the highest monthly annual inflation rate recorded since February 2017 and is consistent with analysts’ views that inflation rates are likely to come in above 6% during 3Q 2022.
“Namibia remains a small open economy with a high import requirement, making the country’s inflation dynamics susceptible to global price developments. Globally, we continue to see deflationary pressures in certain key areas such as metal and energy commodities, supply chains and food,” Klein shared.
Since March 2022, global supply chain pressures have eased by 47.1% and global shipping costs have declined by 59.1%. While various events have emerged and temporarily heightened supply chain constraints, the data appears to show that the worst of supply chain disruptions could be behind us, allowing logistical costs to continue normalising to pre-pandemic levels going forward, the analyst added.
He stated that disruptive events include the truck driver strikes in Canada and Western Europe, Covid-zero policies in China, the war in Ukraine, droughts in central Europe and railway worker strikes in the United States (US).
Already some Namibian companies indicate that their shipping costs from destinations such as China and Europe have declined significantly, however still slightly above pre-pandemic levels for some.
Klein said that despite the global deflationary pressures observed, the weak Rand exchange rate will delay global deflationary pressures in providing local consumers with lower goods prices.
“We therefore believe that Namibia’s inflation figures could likely only start showing signs of easing toward the end of the year of early 2023, following a slow descent. The Rand typically strengthens in the fourth and first quarter of each year. If this long run pattern materialises, together with global deflationary pressures, then we should see lower local inflation rates being recorded,” Klein concluded.
RISING COSTS: File photo for illustrative purposes only.
