WINDHOEK – Annual inflation climbed two percentage points in August to reach 6 percent from 5.8 percent recorded in July, according to the new Consumer Price Index released by the National Statistics Agency (NSA).
The Consumer Price Index (CPI) grew by an index point from 204.4 to 205.4, with a monthly increase of 0.5 percent, while the monthly inflation rate for goods was estimated at 0.6 percent and that of services at 0.3 percent. The increase in the prices of goods is attributed to increases recorded in the categories of public transportation services that cover air fares, as well as railway, bus and taxi fares. Other categories that brought about the increase are the repair charges for footwear, dry cleaning and the repair and hire of clothing. The annual inflation rates for the major groups comprising the Namibia CPI were food and non-alcoholic beverages at 6.7 percent; housing, water, electricity, gas and other fuels at 7.8 percent, and transportation at 6.8 percent. These figures showed a stronger growth rate compared with last year’s rates of 7.3 percent for food, 7.4 percent for housing, water and electricity, and the 6.2 percent for transportation. “Year to date figures suggest that inflation is growing by 0.5 percent every month. Average inflation at the end of July for Namibia was 6.4 percent, while inflation in South Africa is 5.6 percent,” said Daniel Kavishe, analyst at Simonis Storm Securities, a local brokerage and research firm.
The index for food and non-alcoholic beverages rose from 240.6 in July 2013 to 241.6 resulting in a monthly increase of 1.0 percentage point. The August increase in the food and non-alcoholic beverages index was caused by rising prices in the categories of bread and cereals at 2.1 percent, mineral water, soft drinks and juices at 1.2 percent, oils and fats at 1.1 percent, and fish at 0.7 percent.
“Inflation in the housing, water and electricity category is picking up again and we suspect towards the October and November, it might surpass the 9.7 percent growth experienced in June,” said Kavishe. The August annual inflation stood at 7.8 percent as compared to July’s 7.2 percent. “Month on month growth of 1 percent is a bit lower than we initially expected, but we believe it will pick up by September. Year on year changes show that the sub-category electricity gas and other fuels is up to about 7 percent, which is in line with the increase in the price of utilities that took place in July.”
Recreation and culture dropped to 172.2 from 175.5 on the index, a month on month decrease of -0.2 percentage points. This effectively indicated the end of the tourism season with a monthly decrease in the holiday packages of minus 3.4 percent. The index value in this sector dropped from 280.0 to 270.5 and is expected to be much lower in the coming months.
Positive numbers in the July car vehicle sales, the highest numbers recorded over the past two years, led to a spike in the category. “The effects were short lived though as rampant strikes in South Africa raise serious concerns. We therefore expect September’s numbers to reflect a decline in the purchase of vehicles. Regardless, August numbers reflected July’s positive sales with an annualized growth rate of 6.8 percent, up from last month’s yearly growth of 5.7 percent,” said Kavishe.
By Staff Reporter