17 September 2021 | Wirtschaft
Relief from the price monster in August
The biggest monthly deflationary pressures were experienced in the transport, alcoholic beverages and tobacco categories.
We maintain our annual inflation forecast at 3.5% for 2021. Theo Klein, Economist: Simonis Storm
Statistics released by the Namibia Statistics Agency (NSA) indicated that on a monthly basis, inflation decreased by 0.2% in August 2021 compared to an increase of 0.2% in July 2021. This is the first month where deflation was recorded on a monthly basis this year.
In addition, annual inflation stood at 3.4% in August 2021, up from 2.4% recorded in August 2020, an increase of 1.0 percentage points. In July 2021, annual inflation stood at 4.0%, a decline of 0.6 percentage points.
The deflation recorded in August 2021 was mainly reflected in the transport category that recorded a decline of 1.6% compared to an increase of 1% in the preceding month. The decline in transport was mainly reflected in the public transportation services that declined by 9.9% in August 2021, NSA pointed out.
The highest change in the annual inflation rate were mainly witnessed in the categories of transport and miscellaneous goods and services, both increasing by 6.2% followed by food and non-alcoholic beverages (5.2%), furnishings, household equipment and routine maintenance of the house (4.6%) and health (3.5%), while clothing and footwear registered a deflation of (2.7%), NSA said.
With regard to the zones, Zone 3 (//Kharas, Erongo, Hardap and Omaheke) recorded the highest annual inflation rate of 4.5%, followed by Zone 1(northern regions) and Zone 3 (Windhoek), all recording an annual inflation rate of 3.1%.
On a monthly basis, the inflation rate for Zone 1 declined by 0.2% compared to 0.1% increase recorded during the previous month.
In addition, Zone 2 monthly inflation was stagnant in August 2021 compared to an increase of 0.2% recorded a month earlier.
Lastly, Zone 3 monthly inflation declined by 0.2% compared to an increase of 0.2% recorded in the preceding month, NSA said.
According Simonis Storm economist Theo Klein, consumers can expect higher car spare part prices at local workshops due to global supply constraints in the shipping industry. This problem is not expected to disappear in the near future, so prices of any imported products will remain elevated in the coming months.
Meat prices, more specifically beef and lamb prices are expected to remain on an upward trend given supply shortages in ewe stock for farmers who want to upscale their farming operations and lower cattle marketing activity taking place in Namibia.
“Year to date, inflation averages 3.5% which is exactly in line with our forecast. We maintain our annual inflation forecast at 3.5% for 2021. Annual inflation therefore needs to record 3.7% on average in the coming months in order to reach our forecast," he said.