Chamwe Kaira
Namibia recorded a 3.5% annual inflation rate in May, placing it in a stable position compared to neighbouring countries.
South Africa reported a lower inflation rate of 2.8% in April, which remained within the target range set by the South African Reserve Bank, according to a report by Simonis Storm Securities. Botswana maintained low and steady inflation, with prices rising by 2.3% year-on-year in April.
In contrast, some countries in the region are facing much higher inflation. Zambia recorded an inflation rate of 15.3% in May, down from 16.5% in April. Angola’s inflation dropped to 20.74% in May, its lowest level since December 2023, but it remains in double digits.
The report said Namibia’s inflation appears moderate and well-anchored. It is higher than in South Africa and Botswana but much lower than in Zambia and Angola. “This relative price stability provides a supportive backdrop for economic policy and helps anchor consumer expectations, even as inflationary dynamics across Southern Africa remain highly uneven.”
Following the May inflation figure, Simonis said it expects inflation to remain stable in June, likely between 3.2% and 3.4%. On a monthly basis, prices are expected to rise by between 0.1% and 0.3%, reflecting low pressure across most areas of the consumer price basket.
“While core inflation remains elevated, recent developments, particularly the downward adjustment in domestic fuel prices, are expected to help anchor overall inflation in the near term,” the report said.
Food and non-alcoholic beverages continued to push inflation higher in May. Prices in this category rose by 5.8% year-on-year. Fruit prices increased by 15.5%, meat by 8.8%, and oils and fats by 9.1%.
“These inflationary pressures are largely rooted in climate-related disruptions, logistical constraints, and firm household demand. However, with improved harvesting conditions in parts of the region and slower import cost growth, food inflation may begin to stabilise, though it is still expected to remain above 5.5% in June,” the report said.
Simonis noted that the Bank of Namibia began its monetary easing cycle earlier this year, but any further rate cuts are likely to be cautious due to persistent core inflation and global uncertainty.
The report said elevated tensions in the Middle East and global shipping delays could impact oil prices, commodity availability, and input costs, especially for food and energy imports.
It added that policy changes affecting fuel levies, transport subsidies, or electricity tariffs would remain key factors to monitor, as they could directly influence consumer inflation.
