Consumers in Namibia have been experiencing higher prices on products and services recently due to many economic disruptions caused by Covid-19. 

December 2021 recorded an increase of 4.5% compared to 2.4% recorded in December 2020. On a monthly basis, the inflation rate slowed to 0.4% compared to 0.6% registered in the preceding month.

Inflation refers to a general progressive increase in the prices of goods and services in an economy. 

When the general price level rises, each unit of currency buys fewer goods and services. 

Consequently, inflation corresponds to a reduction in the purchasing power of money.

Pointing to key highlights for December 2021 inflation last week, statistician general at the Namibia Statistics Agency (NSA) Alex Shimuafeni said the annual inflation rate for goods was estimated at 5.8%, while the rate for services stood at 2.7%.

“The average annual inflation rate for the period December 2020 to December 2021 stood at 3.5%. The 12-month average annual inflation rate from January 2021 to December 2021 was estimated at 3.6%,” stated Shimuafeni.

He noted the calculation of the inflation rate is vital for purposes of economic policy-making, especially the conduct of monetary policy and to consumers in general.

He said the main contributors to the annual inflation rate for December 2021 were mainly transport (two percentage points), food and non-alcoholic beverages (0.9 percentage points), alcoholic beverages and tobacco (0.5 percentage points), miscellaneous goods and services (0.4 percentage points).

Housing, water, electricity, gas and other fuels contributed 0.3 percentages points; furnishings, household equipment and routine maintenance of the house contributed 0.2 percentages, while health, recreation and culture contributed 0.1 percentage points each.

According to him, the transport category, which accounts for 14.3% of the consumer basket continues to be the main driver of the overall inflation, increasing by 14.3% in December 2021 compared to a decrease of 1.3% recorded in December 2020. 

“The increases in the transport component were reflected in the price levels of all subgroups, except air transportation that recorded deflation of 10.7%. Transport monthly inflation rate stood at 2.1% in December 2021, compared to 1.5% recorded in November 2021,” said Shimuafeni.