Windhoek — Analysts expect food inflation and transport inflation to remain relatively subdued in the coming months.

Food would be coming off of a relatively high base, while transport inflation would be kept in check by a relatively stable oil price due to weak global demand. The forecast for average inflation this year is 6.2 percent, which is lower than the 6.5 percent recorded last year.

Annual inflation in December dropped substantially to 6.3 percent from 7.6 percent in November. This is the first decrease in four months. The decrease can be attributed to food inflation falling to 8.2 percent from 11 percent the previous month, while transport inflation also contributed and decreased from 6.7 percent in November to 5.8 percent in December.

The December inflation rate brings the average inflation for 2012 to 6.5 percent, compared to average inflation of 5 percent in 2011.

Food inflation decreased 1.1 percent on a monthly basis, with bread and cereals, meat, milk, cheese and eggs, non-alcoholic soft drinks, as well as mineral water, soft drinks and juices all decreasing by more than a percentage point.

There was however a slight month-on-month increase in the food categories of fruit going up 2.2 percent, fish a 0.4 increase and oils and fats at 0.5 percent. The average food inflation for 2012, despite the monthly decrease, was still 8.8 percent compared to 5.1 percent recorded in 2011.

Transport inflation remained unchanged on a monthly basis, dropping to 5.8 percent from 6.7 percent in November. The average transport inflation in 2012 was 7 percent, compared to 5.2 percent in 2011.

Among the categories that recorded higher inflation in December compared to November were housing and utilities, which increased to 7.6 percent year-on-year from 7.4 percent in November, while the month-on-month increase is 0.2 percent.

The average inflation for housing and utilities in 2012 was 6.1 percent compared to 9.8 percent in 2011, which is quite surprising given the steep municipal services and electricity increases in 2012. Other categories that increased in December were clothing, communication and hotels.

Goods inflation remained on a downward trend, decreasing to 5.2 percent, while services inflation dropped to 8.3 percent after increasing to 9.4 percent in November.