The Namibia Statistics Agency (NSA) released its latest Consumer Price Index (CPI) report, showing that annual inflation rose slightly to 3.7% in June 2025, up from 3.5% in May.
The increase is largely driven by rising food prices and escalating rental and service costs despite a decline in fuel prices that helped temper the overall rise. The CPI is published about 15 days after the end of the reference month to which it relates.
The CPI measured annual inflation rate (headline inflation) for June 2025 stood at 3.7% compared to 4.6% registered in June 2024.
On a monthly basis, the inflation rate was 0.0%, a slight drop from 0.2% recorded a month earlier.
The Zonal inflation rates for the 12 months ending June 2025 revealed that Zone 1 Kavango East, Kavango West, Kunene, Ohangwena, Omusati, Oshana, Oshikoto, Otjozondjupa and Zambezi regions recorded the highest inflation rate of 3.9%.
They are followed by Zone 3 // Kharas, Erongo, Hardap and Omaheke regions, which recorded a headline inflation rate of 3.7%.
Zone 2 Khomas region recorded an annual inflation rate of 3.3%.
“Analysis of the average retail prices of selected products for the month of June 2025 revealed that consumers in Zone 2 paid the highest price for white bread flour (2.5kg) at N$53.21, followed by Zone 3 at N$51.99. “Consumers in Zone 1 paid the least price of N$49.66 for white cake flour (2.5kg), with consumers in Zone 3 paying the highest price of N$59.19. They were followed by Zone 2 at N$57.55, while consumers in Zone 1 paid the least price of N$52.64,” reads the report. Inflation is a general increase in the prices of goods and services in an economy over a period.
Economist Klaus Schade said inflationary pressures were evident across all major categories.
Food inflation remained the most concerning. Annual food inflation climbed from 5.8% in May to 6.4% in June.
It was pushed higher by a combination of rising meat prices and double-digit inflation in the fruit and vegetable categories. “We are seeing stubbornly high food price inflation, which is being fuelled by reduced livestock marketing as farmers restock herds, and significant price increases in vegetables and fruits. Dairy products, which had previously been in deflation, have also shifted into positive inflation territory,” he said.
Fuel prices were the only major mitigating factor, registering a negative inflation rate for the second consecutive month.
Without this drop, the overall inflation rate would likely have risen more. Schade called for the introduction of inflation measurements segmented by income levels.
“Low-income households are disproportionately affected by food price inflation, meaning their real inflation rate is higher than the national average of 3.7%. This differentiated measure could inform better-targeted policy responses, such as adjustments to social grants,” he said.
Echoing similar concerns, economist Joseph Sheehama warned that while the June figure remains within the Bank of Namibia’s inflation target range, upward pressure is mounting.
“Inflation in June rose to 3.7%, largely due to elevated food prices and increased costs of rent and services. This trend is expected to continue into the latter half of 2025 and 2026, depending on developments in the global market,” he stated.
He highlighted vulnerabilities, including fluctuating oil prices and the potential depreciation of the Namibian dollar against key currencies such as the British pound, though it has remained stable against the US dollar.
“The rising cost of living is eroding consumer purchasing power, especially among lower-income groups. If inflation continues on this path, it could dampen consumer spending and broader economic activity,” he said
A statement issued by First National Bank Namibia economist Helena Mboti says food, housing and alcohol prices remain the largest contributors to inflation.
Their combined contribution increased to 3.1ppts in June, up from 2.85ppts in May, while transport remains in deflation.
“Headline inflation rose to 3.7% year to year in June 2025 from 3.5% in May against our expectations for a further decline to 3.3%, driven by elevated food inflation and increased rental and service costs. Transport prices remained in deflationary territory,” she stated.
-pmukokobi@nepc.com.na
Photo: Heather Erdmann