Namibia: Imported Inflation Pinches From September

29 September 2020

It should not surprise consumers this month and going forward that prices of common goods, especially those imported from South Africa, continue increasing. It is because at production,

South Africa's national statistics agency, StatsSA, yesterday announced the prices of finished goods leaving factories in South Africa, some of which are headed to Namibia, have increased by around 2,4% in August.

This is at headlined level, the raw figure before removing anomalies.

These goods mainly include food, beverages and tobacco products, of which prices increased by 3,4% when compared to last year, as well as the transport equipment segment, which saw prices shooting up by around 8,1% compared to last year.

Compared to July, the producer price index, a measure of the price of finished goods, rose with 0,7% in August 2020.

At producer level intermediate manufactured goods increased in price by 3,2% in August, compared to 2,4% in July 2020, with basic and fabricated metals being the biggest contributors.

Water and electricity rates increased with 6,7% by August, compared with 8,1% in July 2020. Electricity was the main driver.

The annual percentage increase on mining produce was 26,6% in August 2020 compared with 29,6% in July, and the main contributors were non-ferrous metal ores and gold.

With the release of inflation figures for Namibia in mid-September by the Namibian Statistics Agency, head of research Eloise du Plessis said it would be important to keep a close eye on the supply side of consumption to see how the price of goods would be affected in the last few months of the year as economies gradually open up.

In Namibia, inflation has been moderately lower during the Covid-19-imposed lockdown, but has somewhat increased following the easing of restrictions.

Analysts have said supplier prices would be better to monitor, and the reopening of the economy, though it may jack up prices, would not be as influential as prices at source.

Namibia's annual inflation stood at 2,4% in August, while South Africa was at 3,2%.

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