CHAMWE KAIRA
Going forward, upside risks to inflation will persist, especially from food and imported goods prices, which could push up goods inflation which is more sensitive to supply-chain disruptions and raw material fluctuations, particularly amid geopolitical unrest, FNB Namibia economist Helena Mboti has said.
Mboti said given the risk of heightened geopolitical tensions, upside risk to goods inflation remains eminent.
She said Food prices are expected to remain elevated until improved harvest yields in May, while housing and utility costs face upward pressures from anticipated tariff hikes and demand-driven rental inflation. Global oil supply is expected to increase relative to demand, limiting transport inflation risks.
“Therefore, we expect inflation to rise in the short term, reaching 3.9% year on year in March 2025, with an average of 3.8% for 2025, slightly lower than the 4.2% average for 2024,” it said.
Headline inflation increased from 3.2% year on year well below the 5% in February last year.
“Domestic inflation remains largely driven by services, with services inflation (4%), outpacing goods inflation (3.6%). The sticky inflation dynamic is further reflected in core inflation, which edged down by just 0.1% to 3.5% year on year from 3.6% in January 2025,” said Mboti.
She added that food and non-alcoholic beverages remains the main contributor to inflation, adding 1.2 points to the headline print.
However, food prices increased marginally to 5.9% year on year in February, up from 5.8% in February 2024.
“The food sub-category, which makes up 14.8% of the basket, experienced a notable rise in bread and cereals inflation, increasing to 6.1% from -0.4% in February last year.
As bread is a staple with inelastic demand, price hikes have a greater impact on consumers, especially low-income households, reinforcing the psychological effect of rising costs,” Mboti added.
