In July 2020, Namibia’s annual inflation rate slowed to 2.1% from 3.6% recorded in July 2019 while on a monthly basis, the inflation rate remained unchanged at 0.2%. This was confirmed by the Namibia Statistics Agency (NSA) in their latest figures.
The slowdown in the annual inflation rate in July 2020 was largely attributed to declines registered in the price levels of transport from 6.9% to -1.2%; clothing and footwear from 1.2% to -4.3%; education from 12% to 7%, hotel, cafés, and restaurants 3.9% to 0.8% and housing, water, electricity, gas and other fuels 2.2% to -1.5%.
On the regional front, the //Kharas, Erongo, Hardap, and Omaheke regions recorded stagnant month-on-month inflation for July 2020, while regions in the northern part of the country stood at 0.3% and the Khomas region recorded 0.2%.
The annual inflation rates for July 2020 in Kavango East, Kavango West, Kunene, Ohangwena, Omusati, Oshana, Oshikoto, Otjozondjupa, and Zambezi stood at 2.1%. For the Khomas region, the annual inflation rate was estimated at 2.5% while
//Kharas, Erongo, Hardap, and Omaheke registered an inflation rate of 1.5% year-on-year.
Alex Shimuafeni, NSA’s Statistician General and CEO, explained that the inflation rate measures the change in the consumer price index (CPI) for the month under review to the previous month (month-on-month change) as well as to the corresponding month in the previous year (year-on-year change). Shimuafeni said the inflation rate is vital for purposes of economic policy-making, especially the formulation of monetary policy and to consumers in general.
“It is further used in a wide variety of public and private contracts for the purposes of adjusting payments (such as wages, rents, interest, and social security benefits). It, therefore, has substantial and wide-ranging financial implications for governments and businesses, as well as for households,” he said. The index for goods and services for the month of July 2020, stood at 141.9 and 138.7 compared to the corresponding indices of 138.5 and 136.5 recorded during the same period last year. The monthly and annual inflation rates for goods were 0.3% and 2.4%, respectively, while for services the inflation rate was 0.1% and 1.6%.
Annual inflation rate in the northern regions fell to 2.1% in July 2020 from 3.3% recorded in July last year, a decrease of -1.2 percentage points. While the Windhoek area annual inflation rate stood at 2.5% lower than 3% recorded in July 2019. Regions in eastern, southern, and western showed an annual inflation rate that slowed to 1.5% in July 2020 from 5.1% recorded in July 2019.
Leena Amakali, a Windhoek-based entrepreneur, commented on the declining inflation: “I get to spend less and get more. My money has better purchasing power than last year. That still depends on the relative changes in price and income because, with this pandemic, the gains may be less since my income as a household dropped.”
Thabitha Kandjii, a Windhoek resident, commented that low inflation is associated with weakness in the economy. According to her, when unemployment is high or consumer confidence is low, people and businesses may be less willing to make investments and spend on consumption, and this lower demand keeps them from shoring up prices.