CHAMWE KAIRA
Namibian consumer confidence fell to a record low in the fourth quarter of 2026 as rising inflation and borrowing costs weighed on household spending, according to Simonis Storm Research.
The Simonis Storm Consumer Confidence Index (SS CCI) dropped by 12.7 points to 42.2, moving further below the 50-point threshold that separates positive from negative economic expectations.
The decline contrasts with a 4.2-point improvement in the Simonis Storm Business Confidence Index (SS BCI), which rose to 47.2, although it remained below the neutral threshold.
The results point to diverging conditions between export-oriented industries and businesses dependent on domestic consumer spending.
According to the report, household expectations have deteriorated significantly since February 2026, when more than half of surveyed households expected interest rates to decline.
The Bank of Namibia raised its repo rate to 6.75% in June, while annual inflation accelerated from 2.1% in March to 5.4% in September.
Currently, 56.2% of households expect inflation to increase further, while 51.6% anticipate higher interest rates.
Although the job security index remained relatively stable at 55.5 points, households are increasingly concerned about the purchasing power of their incomes.
The report said consumers were avoiding new debt, prioritising savings and postponing major purchases. The durable goods spending index fell to 39.1 points.
Retirees and informal workers recorded the lowest confidence levels, reflecting their exposure to rising living costs and the limitations of fixed or less predictable incomes.
“The shift in household expectations since February is larger than we expected,” the Simonis Storm Research team said in the report, attributing much of the deterioration to fuel prices and the June interest rate increase.
Mining and energy recorded a business expectations score of 63.3, supported by uranium production, logistics activity and investment along the coast. Financial services followed with a score of 62.0.
However, businesses serving the domestic market continued to face pressure from weakening consumer demand.
Wholesale and retail businesses reported a new orders index of 8.3, indicating severe weakness in order expectations.
Agriculture recorded the lowest overall confidence score at 27.8. Simonis Storm attributed the sector’s difficulties to foot-and-mouth disease outbreaks and the risk of adverse weather conditions associated with an anticipated El Niño season.
The report said businesses selling directly to households were already experiencing the effects of weaker consumer demand through their order books.
Simonis Storm expects inflation to continue rising, reaching approximately 6.2% in March 2027 before declining significantly in April.
Private sector credit growth is projected to slow to about 4.0% by mid-2027, which the research firm expects to represent negative growth after accounting for inflation.
Namibia’s economic growth is forecast to remain at 2.0% in 2026, supported by stronger activity during the first half of the year and continued performance in the mining sector.
The research firm expects weak sales volumes to persist among retailers and other businesses reliant on household spending into early 2027.
It also warned that these businesses would have limited scope to pass rising operating costs on to consumers as household purchasing power comes under pressure.
