The Namibian annual inflation rate increased further to 6.6% in April. On a month on month basis, prices continued to rise, up 0.6% after the 0.8% uptick seen last month. On a year on year basis, eight of the twelve basket categories grew at a quicker rate in April than in March, pushing up overall inflation. The biggest contributor to inflation on a monthly basis were price increases of food and non-alcoholic beverages once again, while on an annual basis housing and utilities price increases have contributed the most to inflation.
On a month on month basis price increases in the food and non-alcoholic beverages basket category have largely been driven by fruit and vegetables price increases as well as increases in milk, eggs and cheese prices. Annual inflation in the food and non-alcoholic beverages basket category jumped to 11% in April from 9.7% in March. This basket category has experienced rapid inflation over the last three months as the Southern African region continues to suffer from adverse climatic conditions, depreciation in the Namibian dollar as well as rebasing effects due to the impact of low oil prices on prior periods.
Alcoholic beverages and tobacco as the fourth largest basket category made the second largest contribution to monthly inflation followed by furnishings household equipment and routine maintenance costs. On a year on year basis price increases on alcoholic beverages and tobacco slowed from 7.8% in March to 7.1% in April. Alcoholic beverages and tobacco inflation has been consistently above the average inflation figure for most of the last five years when looked at on an annual basis, more consistently so than almost any other basket category.
The annual inflation rate for the category housing, water, electricity, gas and other fuels was stable at 7.5% in April, after spiking from an average rate of well below 3% in 2015, to 7.6% in January this year. Rapid price increases have been seen in this basket category mainly as a result of increases in inflation for rentals and other dwellings. Price increases for rentals and other dwellings have been extremely low for a number of years, as reported by the NSA, and the sudden spike at the beginning of the year has largely resulted in the elevated level of annual inflation we are currently seeing.
The annual rate of inflation in the transportation basket category, the third largest category, slowed further in April to 2.8% from 4.3% in March. Much of this decrease was as a result of fluctuations in the price of oil during the base period as well as currency volatility during April. We expect to see a pickup in transportation inflation due to recent fuel price increases in May as well as base effects coming through on the oil price. This could well drive overall inflation higher still in coming months.
Going forward we expect a further uptick in inflation in May largely due to base effects caused by the drop in oil prices last year as well as more recent currency movements. Adverse effects of the drought currently affecting the region should lead to further increase in food inflation in the coming months, helping to drive overall inflation higher. Namibian CPI has now risen to a level above that of neighbouring South Africa, a situation that we regard as a more accurate reflection of actual inflation pressures experienced by the residents of Namibia. We would expect this relationship to hold going forward.