The inflation rate for January 2015 fell from 4.6 to 4.5 percent on an annual basis but has however increased from -0.2 to 0.8 percent on a monthly basis, according to figures released by the Namibia Statistics Agency (NSA.)
On a monthly basis, inflation was affected by increases in the prices of goods and services in all the groups comprising the National Consumer Price Index (NCPI) with the exception of transport, clothing and footwear as well as recreation and culture, which declined by 1.5, 0. 7 and 0.2 percent respectively.
The monthly inflation figures recorded a month earlier for these categories stood at 0.2 and -1.3 percent while the recreation and culture sub component showed no change.
NSA Corporate Communication Deputy Director, Iipumbu Sakaria, said that the annual basis Inflation rate for January 2015 decreased by 0.1 percentage points, a continuation of the downward trend in inflation which developed since July 2014.
“During the period January 2014 to January 2015, the inflation fluctuated between 6.1 and 4.5 percent. This wavering in inflation is largely on account of prices of food and fuel, exacerbated by a weakening of the Namibia Dollar against major currencies,” said Sakaria.
Sakaria said the major drivers of the annual inflation were, mainly on account of relative importance in terms of weight of the various categories in the overall inflation basket, beverages and tobacco at 7.5 percent, food and non-alcoholic beverages at 6.5 percent and transport at 1.5 percent.
“Additional relatively smaller contributions to inflation were recorded from the minor groups by basket weighting, such as miscellaneous goods and services registering annual inflation rates of 6.6 percent, recreation and culture 4.9 percent and education 4.4 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 to 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 reweighted so as to better capture the current spending patterns of the consumer at the current point in time.
As such, the inflation basket is generally reconstituted every five years. In Namibia, the basket was last rebased in 2013, using household expenditure data collected in the 2009 to 2010 Household Income and Expenditure Survey.
As such, the basket now contains over 350 items, grouped into 12 categories and 55 sub-categories, for which prices are collected on a monthly basis from more than 900 retail outlets.
During January 2015 the services annual inflation rate has generally continued to rise on a fairly low pace when compared to goods inflation.
The goods inflation fluctuated between 7.9 and 4.8 recorded between January 2014 and January 2015.
For the month of January 2015 the Index for Goods and Services stood at 112.3 and 108.4 respectively as compared to the corresponding indices of 107.2 and 104.2 recorded during the same period last year.