Domestic consumers can expect further hikes in prices, which is expected to make life more financially unbearable. This is after the annual inflation rate for July 2022 increased by 6.8%, compared to 4% recorded in July 2021, making it the highest recorded inflation rate since July 2017.
The Namibia Statistics Agency (NSA) released the latest figures last week that showed the annual inflation rate for goods was estimated at 10%, while services stood at 2.5%.
The average annual inflation rate for July 2021 to July 2022 stood at 4.7%, while the 12-month average annual inflation rate from August 2021 to July 2022 was estimated at 4.7%.
The main contributors to the annual inflation rate for July 2022 were transport (3 percentage points), food and non-alcoholic beverages (1.5 percentage points), alcoholic beverages and tobacco (0.7 percentage points), housing, water, electricity, gas and other fuels (0.5 percentage points), furnishing household equipment and routine maintenance of the house each contributed (0.4 percentage points).
“The annual inflation rate for the transport category, which accounts for 14.3% of the consumer basket, continues to be the main driver of the overall inflation, increasing by 20.9% in July 2022, compared to 10.6% registered in July 2021. The increase in the transport component was mainly reflected in the price levels of operation of personal transport equipment, which increased by 35.5%,” reads the bulletin.
Local economist, Omu Kakujaha-Matundu said it is still early to expect a drop in inflation rates, given the increase in fuel food prices, which can partly be attributed to the Ukraine-Russian conflict.
“We thought it was going to be a short war, but it seems there’s no let down in that war,” said Kakujaha-Matundu on the conflict in eastern Europe.
“With other factors, such as the envisaged hike in electricity rates, it seems there’s no reprieve for the consumer. Similarly, the high-interest environment globally, with the Bank of Namibia expected to increase the repo rate in its next MPC sitting, does not help the situation,” Kakujaha-Matundu added.