CHAMWE KAIRA
The country’s headline inflation is projected to climb to approximately 5.2% in 2027, up from an expected average of above 4.35% in 2026, driven by a prolonged global oil shock and mounting domestic food supply threats.
A new economic assessment from Standard Bank Namibia’s group economist, Helena Mboti warns that upside risks remain firmly entrenched.
The ongoing oil crisis, which has kept crude trading above US$100 per barrel, could stretch well into 2027.
Additionally, regional weather strains and localised agricultural shocks are expected to drive up living costs over the coming quarters.
Annual headline inflation rate jumped to 5.4% in September 2026, up from 5.0% in August and significantly higher than the 3.5% recorded in September 2025.
This spike was predominantly driven by goods inflation, which accelerated to 5.8% year-on-year, while services inflation held steady at 4.7%.
Mboti said while the government provided some fiscal cushion by keeping domestic diesel prices unchanged in September, the mitigating effect remains minimal because Namibia imports the vast majority of its consumer goods.
The report noted that food price risks are rapidly transitioning from disinflationary to inflationary due to two major threats.
The Foot and Mouth Disease outbreak confirmed on September 23 has affected roughly 29 000 animals and is expected to drive up meat prices.
The World Meteorological Organization has indicated a near-certain probability that El Niño conditions will persist into early 2027, threatening crop yields and regional food security.
Furthermore, prolonged drought conditions threaten to limit power generation at the Ruacana hydroelectric plant, which would force Namibia to rely more heavily on expensive electricity imports and push utility tariffs higher.
Mboti said relief is anticipated in the second half of 2027. Standard Bank Namibia projects that food pressures will begin to moderate in the second quarter of 2027, assuming weather conditions normalize.
Transport inflation is also expected to slow down during the latter half of 2027. This decline will be driven by favourable base effects, provided global oil prices stabilize around current levels and do not experience further material spikes, according to the report.
