Chamwe Kaira
Namibia’s inflation is expected to average between 3.5% and 3.8% in 2025, trending toward 4% in 2026 as fuel and utility costs stabilise at higher levels, according to analyst Almandro Jansen of Simonis Storm.
Jansen said price pressures remain contained, but risks are tilted to the upside. “At its upcoming MPC meeting, we assign roughly a 60% probability to a further 25 basis points rate cut, aimed at supporting domestic demand while maintaining credibility in anchoring inflation expectations and preserving price stability,” he said.
He noted that the inflation outlook remains steady but slightly upward. Moderating food prices and stable monetary conditions should help maintain price stability in the near term. However, rising costs in the service sector and external pressures could pose new challenges as the economy gains strength in 2026.
Namibia’s headline inflation rose to 3.6% year on year in October, up from 3.5% in September and 3% a year ago, showing a gradual increase in consumer prices. “Although inflation remains comfortably within the Bank of Namibia’s 3% to 6% target range, the recent trend indicates a gradual firming in underlying price pressures as service-related categories, particularly housing, utilities, and transport, gain momentum toward year-end,” Jansen said.
Core inflation stood at 3.7% year on year, slightly above headline inflation, reflecting ongoing domestic price pressures in sectors such as education, housing, and healthcare. Goods inflation rose modestly to 3.4%, while services inflation climbed to 4.0%, showing a shift toward service-driven price growth.
Jansen said Namibia’s inflation path for late 2025 and early 2026 will depend on several factors. Among them are fuel and transport costs, as geopolitical tensions and winter demand continue to support high oil prices. “Any depreciation in the Namibian dollar/Rand exchange rate could quickly translate into higher local pump prices and freight costs,” he said.
He added that housing and utilities will also play a key role, as supply constraints and rising municipal tariffs are expected to keep rental and service costs firm through 2026. On imported inflation, he said the evolving U.S. trade policy stance toward South Africa, including the continuation of tariffs, could raise import prices for vehicles, machinery, and processed goods.
On the global front, the IMF projects worldwide inflation at 6.9% in 2025, with emerging markets averaging 7.2%, showing that international supply chain costs remain elevated.
Caption
Simonis Storm expects inflation to average 3.8% this year.
- Photo: Contributed
