Monthly inflation picks up as annual inflation slows down

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WINDHOEK – Increases in food prices pushed up the monthly inflation in March, but the overall annual inflation remained on its downward trajectory to 3.4 percent from 3.6 percent in February. According to the Namibia Statistics Agency (NSA) consumer price index (CPI) there was an increase in the price of food, as well as in goods and services, which led to a 0.4 percent increase in the monthly inflation rate.

Nevertheless the decrease in transport inflation, from minus 2.6 percent in February to minus 3.7 percent in March, led to the drop in annual inflation. Transport inflation was at 7.4 percent in the same period last year. Annual inflation has been on a decrease since July 2014.

According to the CPI the significant decline in transport inflation over the year has been largely driven by decreases in the subgroup of operation of personal transport equipment, which declined from 8.5 percent in March 2014 to -10.8 percent in March 2015, a movement of -19.3 percentage points over the year.

“This sharp decline in turn is attributable to the decline in petrol and diesel prices which have been showing a downward trend over the past months due to a decline in the price of crude oil. The annual inflation rate of public transportation services has however been constant at around 11 percent,” says the NSA.

“The downward trend in annual inflation is mainly attributable to a deceleration in inflation in the categories of food and non-alcoholic beverages, transport, communications and recreation and culture.”

The major drivers of the annual inflation during the month of March 2015 were recorded in transport which declined from -2.6 percent registered during the preceding month to -3.7 percent. Inflation for communication was at 0.1 percent, clothing and footwear at 1.3 percent, food and non-alcoholic beverages at 5.5 percent, while miscellaneous goods and services at 6.4 percent also slowed during the month of March 2015 as compared to the preceding month.
The decline in monthly food price inflation is recorded in the sub-groups of food and meat, which dropped to 0.6 and 0.4 percent from 1.1 and 0.7 percent registered a month earlier.

The inflation for food and non-alcoholic beverages stood at 0.7 percent. Price increases in this category were mainly observed in the sub components of sugar, honey, jam, syrup at 3.3 percent, vegetables including tubers at 2.7 percent, oils and fats at 1.4 percent, mineral water, soft drinks and juices at 0.9 percent and fruit at 0.6 percent.

The annual inflation rate for the group of alcoholic beverages and tobacco stood at 8.6 percent in March, a 0.9 percentage point increment from 7.7 percent recorded in the previous month. Corresponding rates recorded during the same period a year earlier stood at 5.0 percent. The upward movement of inflation in this category was due to price increases in alcoholic beverages and tobacco.

During the period of December 2013 to March 2015 the petrol and diesel prices increased from January to March 2014. Thereafter, no change was recorded for the period March 2014 to June 2014. However, a continuous decline was observed from the month of October 2014 to February 2015 whereby it stayed the same till March 2015.

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