The Namibia Statistics Agency has released the Consumer Price Index (CPI) for August 2018 on 13 September 2018. The CPI is being used to calculate the monthly (compared to the previous month) and year-on-year (compared to the same month in the previous year) inflation rates. The annual inflation rate eased slightly from 4.5% in July to 4.4% in August 2018, but dropped by one percentage from 5.4% in August 2017. However, it is the second highest inflation rate so far this year only exceeded by price increases in July. On a month-to-month basis, inflation slowed down from 0.5% in July to 0.03% in August.
We summarise the main highlights of the August inflation data:
We expect inflation to pick up again owing to fuel price increases by NAD0.40 per litre in September, which translates into a price increase of 23.4% compared to September 2017. Fuel price increases contribute almost 9% to the overall inflation rate. Fuel price increases have a direct impact on transportation costs and over time on the costs of other products that have to be transported. Furthermore, the depreciation of the Namibia dollar against other currencies such as the US dollar and Chinese Yuan will push up prices for other imported products in the coming months.