Annual inflation slows to 5.4%

Windhoek-The annual inflation rate for the month of August 2017 decelerated to 5.4 percent down from 6.8 percent recorded in August of the preceding year, a slowdown of 1.4 percentage points.

The 5.4 percent annual inflation rate is the same as the annual rate recorded in July 2017. The All Items Index for August 2017 was estimated at 127.3 compared to 120.8 registered in August 2016, an increase of 6.5 index points.

The August 2017 annual inflation rate recorded a notable slowdown in the price levels of Food and non-alcoholic beverages from 11.5 percent in August 2016 to 4.6 percent in August this year, a 6.9 percentage points decrease.

The average annual inflation rate for the period January 2017 to August 2017 stood at 6.6 percent while the corresponding average rate registered during the same period a year earlier was estimated at 6.5 percent.

On a monthly basis, the inflation rate increased to 0.1 percent compared to 0.04 percent registered during the previous month.

During the month of August 2017, the main drivers of the annual inflation rate were housing, water, electricity, gas and other fuels (8.3 percent), education (7.8 percent), hotels, cafes and restaurants (6 percent), health (5.8 percent), and furnishings, household equipment and routine maintenance of the house (5.2 percent).

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 re-weighted, so as to better capture the spending patterns of the consumer at the current point in time.

Source: New Era Newspaper Namibia