Justicia Shipena
Food and non-alcoholic beverages remained the main contributors to price increases in May 2025.
This is despite a slowdown in the country’s annual inflation rate to 3.5%. This marks a decline from 4.9% recorded in May 2024 and slightly below April’s rate of 3.6%.
Consumer prices rose by 0.2% on a monthly basis, unchanged from April.
According to the Namibia Statistics Agency (NSA), the steady rate reflects modest gains in food and alcohol prices, a small rebound in transport costs, and ongoing deflation in housing services.
Core inflation stood at 4.1% in May, down from 4.3% in April.
“Namibia’s core inflation continues to highlight underlying price pressures, particularly in non-tradable sectors such as healthcare, education, and rent,” said Simonis Storm Securities in its inflation report for May 2025.
Junior economist at Simonis Storm Almandro Jansen said the overall inflation rate has slowed, and the persistence of elevated core inflation indicates that essential services continue to experience sustained price pressures.
The transport category, which carries a 14.3% weight in the NCPI basket, recorded an annual deflation of -1.3%.
This is a sharp reversal from the 7.7% increase reported in May last year. A 7.8% drop in fuel prices and slower growth in vehicle prices drove the decline.
Jansen noted that the average annual inflation rate from May 2024 to May 2025 stood at 3.8%.
Fiscal-year inflation, measured from June 2024 to May 2025, came in at 3.7%. Year-to-date inflation averaged 3.6%.
Meanwhile, food inflation slowed to 3.0% year-on-year from 6.2% a year ago.
Services inflation rose to 4.2%, up from 2.9% in May 2024, pointing to a shift in price pressures toward the services sector.
Simonis Storm expects headline inflation to remain broadly stable in June, between 3.2% and 3.4%.
Monthly inflation is projected to increase by 0.1% to 0.3%.
The forecast reflects subdued price movements across most components of the consumer basket, supported by declining fuel costs.
“Recent fuel price adjustments, especially the drop in petrol and diesel by 30 and 70 cents, respectively, should provide temporary relief for households and businesses,” said Jansen.
Food prices rose by 5.8% year-on-year in May. Fruit prices increased by 15.5%, meats by 8.8%, and oils and fats by 9.1%.
These increases stemmed from climate-related disruptions, transport bottlenecks, and solid household demand.
While regional harvest conditions have improved and import cost growth has slowed, food inflation is still expected to remain above 5.5% in June.
Housing and utilities inflation held steady at 3.6% in May. Changes are expected in the coming months. Starting July 1 July 2025, NamPower’s 3.8% electricity tariff hike will take effect, partially cushioned by a N$283 million government subsidy.
Households in the Khomas region, including Windhoek, may experience price pressures earlier if local distributors apply additional charges.
Winter energy demand could add to that burden, Simonis Storm noted.
Simonis Storm pointed to risks that could affect inflation, including oil price volatility due to Middle East tensions, local policy changes on fuel levies and subsidies, and ongoing supply chain issues.
Despite these risks, the firm sees inflation staying stable in the near term, helped by easing pressure in key spending categories.
