By Staff Reporter
WINDHOEK – The Namibia Statistics Agency (NSA) says the inflation rate in the country for November remained unchanged at 5.0 percent on an annual basis.
According to NSA’s Statistician General, Dr John Steytler, the annual inflation rate continued to be driven by alcohol beverages and tobacco, food and non-alcohol beverages, which had expanded by 7.8 and 7.2 percent respectively.
The all items index stands at 109.6 points from 104.7 points in November 2013 which resulted from food and non-alcoholic beverages, transport, clothing and footwear, health as well as communication which dropped to 7.5 , 5.3, 3.8, 1.2 and,-1.1, percent compared to 8.4, 6.6, 4.1, 1.6 and -1.0 percent respectively, recorded a month earlier. The all items index for October 2014 stood at 109.7 as compared to 104.5 recorded in the same period last year.
“Additional relatively smaller contributions to inflation were recorded from the minor groups (by basket weighting), such as recreation and culture (5.4 percent), hotels, cafes and restaurants (6.9 percent) and miscellaneous goods and services (5.0 percent),” explained Steytler.
Inflation is calculated based on a basket of goods and services, containing a representative sample of the goods and or services commonly consumed in Namibia, and weighted in accordance to the relative percentage of expenditure allotted to each of the said goods at household level.
The price of these goods and services are then tracked over time, to illustrate the change in the cost of living over time. As spending patterns change, new products and services are added to the basket, and the basket is reweighed so as to better capture the current spending patterns of the consumer at the current point in time. As such, the inflation basket is generally reconstituted every five years.
In Namibia, the basket was last rebased in 2013, using household expenditure data collected in the 2009/10 Household Income and Expenditure Survey. As such, the basket now contains over 350 items, grouped into 12 categories and 55 sub-categories, for which prices are collected on a monthly basis from more than 900 retail outlets.
Namibian inflation, however, is largely determined by three categories of the overall NCPI basket, namely housing, water, electricity, gas and other fuels, food and non-alcoholic beverages and transport, which cumulatively make up just under 60 percent of the total inflation basket.
Additionally, following the rebasing of the NCPI basket in 2013, alcoholic beverages and tobacco make up an additional 12.6 percent of the basket, meaning that the four largest categories represent well over 70 percent of the total basket. As such, large increases in inflation in these categories has a greater impact on overall inflation than do increases in the lower weighted categories. Thus, it is rare to see major increases in overall inflation attributed to the lower weighted categories, despite the fact that these categories may have seen relatively high inflation in their own right.