Inflation update

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Iipumbu Sakaria*

Last week Thursday, January 12, 2017, the NSA released the latest NCPI figures. The Namibia Consumer Price Index (NCPI) calculates the inflation of the country. Inflation is basically the illustration of the change in the cost of living over a certain period of time. Hence, in layman’s terms, inflation can be used as a proxy for the cost of living. The NSA therefore measures the movement in the general level of prices in two ways, from a year to year basis, as well as from month to month.

In general, Namibian inflation is largely determined by four categories; namely, housing, water, electricity, gas and other fuels; food and non-alcoholic beverages; transport; and alcoholic beverages and tobacco. These four categories by themselves represent well over 70 percent of the total NCPI basket weights.

So, as per the statistics released last week Thursday, the annual inflation rate for December 2016 increased by 3.6 percentage points to 7.3 percent, from 3.7 percent compared to the year earlier.

On a monthly basis the general price levels in Namibia remained unchanged at 0.2 percent as compared to November 2016. When we measure the annual inflation we compare calendar months of the current and preceding year. Hence we say the annual inflation for December 2016 rose to 7.3 percent as opposed to the inflation rate of 3.6 recorded in December 2015.

With regard to the monthly inflation we compare the current and the previous months of the same calendar year. Since the monthly inflation rate in November 2016 was 0.2 percent, the same as for the month of December 2016, we say that on a monthly basis the inflation rate remained the same or unchanged.

Now, looking at the annual average inflation rates in Namibia over the past five years shows that inflation has been declining until it rose again last year. The annual average inflation rate in 2012 stood at 6.7 percent, then declined to 5.6 and 5.4 percent in 2013 and 2014, respectively, before reaching an almost ten-year low figure of 3.4 percent in 2015. In 2016 the average annual inflation rose to 6.7 percent. The lowest figure for the past ten years was recorded in 2005 when the average annual inflation stood at 2.3 percent. The highest average annual inflation rate over the past ten years was recorded in 2009 when it stood at 9.5 percent.

As the Namibia Statistics Agency is mandated with the collection, production and dissemination of official statistics, we shall continue to provide these statistics. Our statistics are not limited to numerical data but also spatial. They are free of charge and are also available on our website. If one requires specific and detailed statistics they are more than welcome to contact us to provide them.

* Iipumbu Sakaria is the Deputy Director:Strategic Communications at the NSA.

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