SSS Forecast August Inflation At 5,6 Percent

SIMONIS Storm Securities (SSS) expects inflation to come in at 5,6% in August or even less due to base effects, the firm said yesterday. The Base effect relates to inflation in the corresponding period of the previous year.

IJG Securities, also in a comment on inflation, said it has revised its annual forecast up by 0,15%, to 5,75% average inflation for 2014.

The Bank of Namibia said last month it expects inflation to average 6% this year. The bank will make third quarter monetary policy announcement tomorrow.

The National Statistics Agency released inflation numbers for July last week. The overall inflation figure stood at 5,6% lower than last month’s inflation of 6,1%.

According to the agency, the Namibia Consumer Price Index (NCPI) has grown by 0,2 index points from 108,9 to 109,1.

The annual inflation rates for the major groups comprising the NCPI were food and non-alcoholic beverages 9,0%, housing, water, electricity, gas and other fuels 3,2%, alcoholic beverages and tobacco 6,1% and transport 8,5%.

The food and non-alcoholic beverages index contracted from 112,6 to 111,6, representing a monthly decrease of 0,9% and but a yearly growth of 9%.

Food imports are expected to have a further undesired consequence on the overall rate of food inflation. Recent independent study shows that food prices are expected to escalate.

Transport inflation stands at 8,5% on the back of increasing public transportation services. Fuel prices have remained steady over the past few months therefore decelerating the rate of transport inflation.

Recreation and culture inflation remains above the 6%. Growing at 6,2% on an annual basis, this category is expected to see further price raises as tourist flood the Namibian scene. The index grew from 109,6 to 109,7.

The housing, water, electricity, gas and other fuels index, with the highest weight of 28,4% in the consumer basket, remains subdued at a growth rate of 3,2% on an annual basis, but growth on a monthly basis was relatively high 0,7 index points.

In the alcoholic beverages and tobacco index, inflation numbers in this category stood at 6,1% for July. The index in this category grew by 0,5% from 113,8 to 114,4.

Source : The Namibian