Chamwe Kaira
Simonis Storm Securities has maintained Namibia’s 2026 average inflation forecast at between 4.5% and 5.0%, warning that rising global oil prices could push inflation even higher in the coming months.
According to the firm, under its base-case scenario, where Brent crude oil trades between US$95 and US$110 per barrel through the second and third quarters of 2026, Namibia’s inflation rate is expected to rise to between 4.0% and 4.5% by mid-year before easing slightly later if oil markets stabilise.
Simonis Storm cautioned that there are still potential inflation risks.
The firm said if disruptions in the Strait of Hormuz continue and Brent crude remains above US$110 per barrel for a prolonged period, Namibia’s inflation rate could rise closer to 5.5% to 6.0% by the third quarter of 2026.
According to the firm, Namibia’s inflation rate of 3.1% in April confirms that the country has likely moved past the lowest point of its inflation cycle, which was recorded at 2.1% in March.
“The 1.0 percentage point increase in a single month, driven predominantly by the fuel shock, marks the sharpest monthly acceleration in inflation in more than three years,” the report said.
Simonis Storm identified fuel prices as the main driver behind the recent increase in inflation.
Following the April fuel adjustment, petrol prices increased by N$1.40 per litre in May, while diesel rose by N$4.63 per litre.
At Walvis Bay, petrol prices have increased to about N$23.48 per litre, while diesel now costs about N$28.26 per litre.
The firm said the government’s temporary 50% fuel levy reduction remains in place until the end of June, but fuel prices are nearing levels last seen during the 2022 global energy crisis.
“If Brent crude remains above US$100 and the levy relief is not extended beyond June, additional fuel increases remain a real possibility,” the report stated.
Simonis Storm warned that fuel costs alone could add another two to three percentage points to headline inflation in the coming months.
The firm said inflationary pressures are now spreading beyond fuel prices into transport, food, utilities and services.
Taxi fares are expected to increase from N$13 to N$15 during May, while ride-hailing services such as Yango have reportedly increased fares by around 5%.
Simonis Storm said higher diesel prices are also expected to increase transportation, refrigeration and distribution costs in the food supply chain.
The firm expects food inflation, currently at 2.0%, to rise to between 3.0% and 3.5% by the third quarter of 2026.
The report also identified the weakening South African rand as a risk to inflation due to Namibia’s currency peg and reliance on imports from South Africa.
Housing inflation currently stands at 4.4%, driven by rising electricity and utility costs.
Simonis Storm said a possible 8.40% tariff increase by NamPower could place further pressure on consumers later this year.
The report also noted that municipalities are introducing tariff increases.
The Swakopmund Municipality recently approved a 5% increase in water, wastewater and refuse tariffs for the 2026/27 financial year.
According to Simonis Storm, inflation pressures are broadening into utilities, municipal charges and services across the economy.
Inflation in hotels, cafés and restaurants currently stands at 4.9%, while health services inflation is at 4.8%, both above the national inflation rate.
