The Namibian annual inflation rate edged up to 5.1% y/y in October, up from 4.8% y/y in September. Prices in the overall NCPI basket increased 0.4% m/m in October. On an annual basis, prices in six of the twelve basket categories rose at a quicker rate in October than in the previous month, while three categories recorded slower rates of inflation and three categories remained unchanged. Prices for goods increased by 5.3% y/y while prices for services increased by 4.8% y/y.
Transport, the third largest basket item, was the largest contributor to annual inflation, accounting for 1.8% of the total 5.1% annual inflation figure. Transport prices increased by 1.2% m/m in October, which is slower than the 3.7% m/m increase recorded in September. However, on an annual basis, the 13.6% y/y increase in transport prices is faster than the 12.9% y/y growth recorded in September due to base effects. Prices in the three sub-categories all recorded increases on a year-on-year basis. Prices relating to the purchase of vehicles increased at a rate of 6.0% y/y, while prices relating to the operation of personal transport equipment increased by 15.5% y/y. Prices related to public transportation services increased by 18.0% y/y. The increase in oil prices for most of the year has been the driver of the increases in this basket category.
The Ministry of Mines and Energy increased fuel prices by 50c per litre in October. The minister stated that the exchange rate between the Namibian Dollar and the US Dollar (against which oil is priced) and the international oil price were the major factors contributing to the increase. The Ministry have announced further increases in November of 50c per litre and 70c per litre for Unleaded Petrol and Diesel, respectively, meaning that further pressure will be exerted on the transport price inflation. Oil prices peaked in October in Namibia dollar terms and have since declined by over 35% which may bring some relief in fuel prices in the coming months.
The Housing and utilities category was the second largest contributor to annual inflation due to its large weighting in the basket. Prices for this category remained flat m/m for a second month and increased 3.8% y/y. Prices in the electricity, gas and other fuels subcategory increased at 9.5% y/y, faster than inflation of 9.0% y/y recorded in September. The regular maintenance and repair of dwellings subcategory recorded an increase in prices of 3.7% y/y, which is a marginally faster rate of increase than the 3.4% y/y registered the previous month. Month-on-month, prices of all the subcategories remained unchanged.
Alcoholic beverages and tobacco, the fourth largest category, saw marginally slower price increases of 4.9% y/y and 0.3% m/m. Prices of alcoholic beverages rose 5.3% y/y while tobacco prices increased by 3.2% y/y.
