17 Feb 2019 12:30pm
WINDHOEK, 17 FEB (NAMPA) - Consumers have been paying more for food and non-alcoholic beverages as prices continued the upward trend, owing largely to the high inflation rate in January compared to December 2018.
This observation was made by the Economic Association of Namibia (EAN) in its review of the latest Consumer Price Index (CPI) released by the Namibia Statistics Agency.
The month-to-month inflation rate rose to 5.7 per cent in January 2019, up from 5.2 per cent in December 2018, while food prices increased by 6.1 per cent in January compared to 5.4 per cent in December.
Overall, the annual inflation rate dropped further to 4.7 per cent in January from 5.1 per cent in December and 5.6 per cent in November 2018.
It is, however, 120 basis points higher than in January 2018 (3.6 per cent).
In a media statement released on Sunday, the EAN said this marks the highest inflation rate in almost two years.
The main drivers of the high inflation are price increases for bread and cereals of 8.3 per cent in January after 7.9 per cent in December, and meat prices which rose slightly faster in January (3.6 per cent) than in December (3.5 per cent).
These two categories contribute almost 57 per cent to the total food price inflation.
Food and non-alcoholic beverages bear the second highest weight (16.5 per cent) in the consumption basket, as both alcohol and tobacco products contributed to the increase in the inflation rate from 5.9 per cent to 6.4 per cent for the category alcohol and tobacco.
The inflation rate for housing, water, electricity, and other services however continued to decline, reaching the lowest level since December 2015.
Prices for such services increased by 2.9 per cent in January compared to 3.1 per cent in December 2018 and to 2.7 per cent in December 2015.
Rental payments, according to the EAN, contributed 23.3 per cent to the total inflation rate and 82.1 per cent to the inflation rate for the category housing etc.
Prices for rental payments increased by just 2.3 per cent, while prices for the maintenance of dwellings rose by 3.3 per cent in January 2019 up from 2.5 per cent in December, the EAN statement said.
The EAN further warned that prices for basic food commodities will come under pressure in the coming months, as the current economic dry spell continue.
In addition, further price increases for alcoholic beverages and tobacco products can be expected this month with the annual increase in excise duties, the EAN noted.
The EAN further said despite upward price pressure in some categories, inflation is however, expected to remain well within the 3 per cent to 6 per cent band targeted by the South African Reserve Bank.
According to the statement, lower global oil prices contributed further to the lower inflation rate, which could positively impact some sectors.