Windhoek-The latest figures released by the Namibia Statistics Agency (NSA) indicate that the annual inflation rate for December 2017 stood at 5.2 percent compared to 7.3 percent registered in December 2016.
On a monthly basis it stood at 0.2 percent compared to 0.3 percent registered in the preceding month. Although the annual inflation rate has remained constant at 5.2 for the past 3 months (October to December 2017), the actual indices were 127.9, 128.2 and 128.4 respectively.
The annual price levels were driven by prices in all the categories comprising the NCPI with the exception of housing, water, electricity, gas and other fuels, transport and education, which expanded by 9.2, 6.7 and 7.8 percent respectively.
The December 2017 All Items Index increased to 128.4, up from 122.1 in December 2016. The average annual and average monthly inflation rate for the year 2017 stood at 6.2 and 0.4 percent as compared to 6.7 and 0.6 percent registered a year earlier.
On a monthly basis, price levels were affected by decreases in the prices of goods and services in the categories of hotels, cafes and restaurants which declined by 1.8 percent, alcoholic beverages and tobacco by 0.7 percent and recreation and culture by 0.1 percent.
The main drivers of the annual inflation rate for the month of December 2017, were mainly housing, water, electricity, gas and other fuels (9.2 percent), education (7.8 percent) and transport (6.7 percent).
The annual inflation for the food and non-alcoholic beverages category stood at 2.4 percent in December 2017 compared to 12.5 percent registered during the same period last year, a decrease of 10.1 percentage points.
The slowdown in this group emanated from decreases recorded mainly in the subcomponents of bread and cereals which declined to -4.7 percent from 14.1 percent and oils and fats to -1.6 percent from 12.1 percent recorded during the same period of the preceding year.
The monthly inflation rate for this category, increased to 0.1 percent compared to -0.1 percent registered in the previous month.
The annual inflation rate for the alcoholic beverages and tobacco group stood at 4.6 percent in December 2017 compared to 5.6 percent registered in December 2016, resulting in a decrease of 1.0 percentage points.
The downward movement of inflation in this category during this period was due to the decline in the price levels of alcoholic beverages sub-component, which reduced to 4.7 percent as compared to 6.8 percent recorded in December 2016.
The monthly inflation rate for this group stood at -0.7 percent, compared to 0.3 percent recorded a month earlier.
Inflation is calculated based on a basket of goods and services, containing a representative sample of the goods and or services commonly consumed in a country, and weighted in accordance with the relative percentage of expenditure allotted to each of the said goods at household level.
The price of these goods and services are then tracked over time, to illustrate the change in the cost of living over time.
As spending patterns change, new products and services are added to the basket, and the basket reweighted to better capture the current spending patterns of the consumer at that point in time.
As such, the inflation basket is generally reconstituted every five years. In Namibia, the basket was last rebased in 2013, using household expenditure data collected in the 2009/10 Household Income and Expenditure Survey.
The basket now contains over 350 items, grouped into 12 categories and 55 sub-categories, for which prices are collected on a monthly basis from more than 900 retail outlets.