Escalating fuel prices push inflation rate on upward trajectory – New Era

WINDHOEK – The Namibia Statistics Agency released Consumer Price Index (CPI) for June 2018, indicating that the inflation rate continued its upward trajectory, increasing from 3.8 percent in May to 4.0 percent in June 2018 compared to a year ago. This upward tick reflects the strongest price increases so far this year, but the inflation rate remains lower than the annual inflation rate in June 2017 that stood at 6.1 percent. On a month-to-month basis, inflation slowed down from 0.4 percent in May (compared to April) to 0.2 percent in June 2018 (compared to May). The CPI is being used to calculate the monthly (compared to the previous month) and year-on-year (compared to the same month last year) inflation rates.

“Inflation is continuing its upward trajectory mainly because of fuel price increases. We have, however, expected a sharper increase in transport inflation, and hence in overall inflation, since fuel prices for Windhoek increased by an average of 14.5 percent in June 2018 compared to June 2017. Fuel price increases in July and most likely in August will put further upward pressure on the inflation rate. Fuel price increases will also affect production costs and, if continue, will result in second-round effects and price increases for goods sensitive to the cost of fuel,” commented Klaus Schade, Research Associate at the Economic Association of Namibia (EAN)…