Inflation Rate Slowed to 4,6 Percent in December

THE inflation rate for December dropped from 5% in November to 4,6% on an annual basis and also decreased on a monthly basis from 0,2% to -0,2%, the Namibia Statistics Agency said on Friday.

On a monthly basis, inflation was affected by decreases in the prices of goods and services in the categories of hotels, cafes and restaurants which declined by 2,1%, transport by 1,3% and alcohol beverages and tobacco by 0,4%.

On an annual basis however, inflation remains driven by prices in the categories of alcohol beverages and tobacco and food and non-alcohol beverages, which have expanded by 7,1% and 7% respectively.

The December 2014 All Items Index increased to 109,8 up from 104,9 in December 2013. The average annual and average monthly inflation rates for the year 2014 stood at 5,4% and 0,4% as compared to 5,6% and 0,4% registered a year earlier.

The December rate showed a continuation of the general downward trend in inflation seen since May 2014.

During the period between December 2013 and December 2014, the inflation fluctuated between 4,6% and 6,1%.

“This wavering in inflation is largely on account of prices of food and fuel, exacerbated by a weakening of the Namibian dollar against major currencies,” the agency said.

The major drivers of the annual inflation were, mainly on account of relatively large weighting of these categories in the overall inflation basket, food and non-alcoholic beverages (7,2%), alcoholic beverages and tobacco (7,8%) transport (3,9%).

Namibian inflation, is largely determined by three categories of the overall Namibia Consumer Price Index basket, namely housing, water, electricity, gas and other fuels, food and non-alcoholic beverages and transport, which cumulatively make up just under 60% of the total inflation basket.

Additionally, following the rebasing of the NCPI basket in 2013, alcoholic beverages and tobacco make up an additional 12,6% of the basket, meaning that the four largest categories represent well over 70% of the total basket.

During the year 2014 some items had high volatile prices which had significant impact in the overall inflation and contributed immensely to the decline of inflation rate. The items such as alcoholic beverages prices have been fluctuating between (-0.6% and 3.2 percent), personal transport equipment (-2,3 and 1,9%) and accommodation services (-4,5% and 6,2%) since December 2013.

“The accommodation and the alcoholic beverage categories prices went down significantly in December 2014 due to special prices applied in some hotels and bottle stores.

The personal transport equipment sub category declined because of petroldiesel prices which have been dropping since July 2014 due to declines in the price of crude oil,” the agency said.

Source : The Namibian