Chamwe Kaira
FNB Namibia has maintained its inflation forecast at 3.5% year-on-year for 2025.
Economist Helena Mboti said transport and housing costs are expected to keep mild upward pressure on prices, while good rainfall prospects should support lower food inflation over the medium term.
“Overall, the outlook remains stable, although higher global oil prices and persistent geopolitical risks could add to transport and imported cost pressures in the short term,” she said.
Headline inflation rose to 3.5% in September from 3.2% in August, mainly due to higher transport costs.
The purchase of vehicles subcategory increased to 4.4% year-on-year from 2.8% in August. The Namibia Statistics Agency (NSA) attributed this to broad price increases across motorcycles, bicycles, and motorcars.
This increase lifted overall transport inflation to 1.3% from a contraction of 1.0% in August, contributing 0.2 percentage points to headline inflation.
“It also marks the first positive contribution from transport since March, suggesting that base effects are now beginning to lift the category as anticipated. According to the Ministry of Mines and Energy, international oil prices increased due to heightened geopolitical tensions, though a stronger Namibian dollar helped offset some of the cost pressures,” Mboti said.
Fuel prices remained unchanged for October, with petrol at N$20.37 per litre, diesel 50ppm at N$19.92, and diesel 10ppm at N$20.02. Prices have remained unchanged since August.
“Nonetheless, sustained geopolitical tensions may keep transport inflation elevated and add further upward pressure to headline inflation in the months ahead.”
Housing, water, electricity, gas, and other fuel inflation increased to 3.6% in September from 3.4% in August, contributing 0.9 percentage points to headline inflation.
The increase was driven by higher electricity and gas costs, which rose by 3%, and higher water and sewerage costs at 4%, while rental inflation eased slightly to 3.7% from 4.2% a year earlier.
“Although rental inflation eased, rents remain the strongest-rising component of the housing and utilities category, and together with higher utility prices, the housing costs are likely to stay elevated, keeping household budgets under pressure in the near term,” said Mboti.
Food and non-alcoholic beverage inflation eased slightly to 4.9% in September from 5.2% in August.
This reflects lower price growth across most categories except for fish at 9.0%, meat at 3.0%, oils and fats at 2.6%, and fruit at 4.8%.
“Improved regional agricultural output has helped anchor food price dynamics, although the sector remains in contractionary territory as livestock herds gradually rebuild. The improved production outlook, reinforced at the recent Agricultural Outlook Conference held in Windhoek, points to stronger crop yields supported by favourable rainfall in the 2025 planting season and even better prospects for 2026. These developments are expected to further ease food price pressures, providing moderate relief to headline inflation and household purchasing power,” said Mboti.
Caption
Good rainfall is expected to help food prices.
- Photo: Contributed
