Martin Endjala
The annual inflation rate in the transport category exhibited a significant slowdown, recording 4.0 percent in December 2023.
This was a notable decrease from the 5.1 percent recorded in November 2023 and a sharp deceleration from the 14.8 percent reported in December 2022.
According to Simonis Storm Economist Halleluya Ndimulunde, this slowdown can be attributed to the subcategory of personal transport equipment, which benefited from a reduction of 130 cents in the prices of both diesel and petrol in December 2023.
Ndimulunde noted that this pricing adjustment was announced by the Namibian Ministry of Mines and Energy, emphasizing that fuel prices in Namibia are largely influenced by international oil costs and the rand exchange rate, as oil is priced in US dollars.
She explained that a primary factor behind the decline in fuel prices was a decrease in crude oil prices, which resulted from increased production by the United States of America, Venezuela, Guyana, and other non-OPEC countries.
Based on the observed data and current economic indicators, it is projected that inflation rates will continue to show a downward trajectory in the coming year.
For the fiscal year 2024, an average inflation rate of approximately 4.9 percent is forecasted. Ndimulunde underlined that this forecast is supported by the expectation of persistently lower petrol and food prices, along with a stable Rand, especially in the first quarter of 2024.
These factors are expected to play a significant role in moderating headline inflation in Namibia.
However, global economic trends, particularly in the energy and food sectors, are likely to continue influencing local inflation dynamics.
“It is crucial to note that our projections are subject to potential shifts in global economic conditions, policy changes, and unforeseen events that could impact commodity prices and exchange rates,” Ndimulunde cautioned.
Therefore, their analysis will remain adaptable, responding to emerging data and trends to provide the most current and relevant economic insights.
In contrast, the healthcare inflation sector experienced a notable increase, rising from 3.4 percent in November 2023 and 2.0 percent in December 2022 to 3.9 percent in December 2023.
This increase can largely be attributed to rising costs in medical services and pharmaceuticals, aligning with global trends in healthcare expenses.
