PSG Sees Inflation Averaging At 4,4 Percent This Year

INFLATION is expected to bottom out during the second half of this year followed by an upward trajectory during the first half.

“By our estimates, the combined impact of a depreciating currency, some base effects, higher domestic electricity tariffs and a projected upward trajectory in South African inflation will result in full-year inflation averaging around 4,4% during 2015, from 5,35% seen last year. We expect the Bank of Namibia’s (BoN) next move on interest rates to again be an upward adjustment of 25 bps and for this to happen within the next nine months,” said PSG Namibia director, Brian van Rensburg.

The Namibia Statistics Agency reported last week that the country’s consumer price inflation declined in April to its lowest level since October 2005.

The Namibia Consumer Price Index (NCPI) increased by only 2,9% year-on-year during April, easing from 3,4% year-on-year recorded in March.

“The last time that headline inflation was this low was nearly a decade ago at a time when services cost inflation was very low. This time around, goods price inflation is below the services equivalent as a result of notably cheaper energy products,” said Van Rensburg.

Operation of personal transport equipment was on average 10% year-on-year cheaper during February – April this year due to the positive impact of a drop in international oil prices during the first half of 2014 on local fuel prices.

Source : The Namibian