Namibia's inflation to average 4.5% in 2025, says FNB

NB Namibia anticipates overall price levels to remain comfortably within the Bank of Namibia's (BoN) target inflation band of 4% to 6% for the rest of 2025, projecting an average of 4.5%. This assessment follows the release of the bank's latest Private Sector Credit Extension report.While FNB remains optimistic about stable inflation, it highlighted potential upward risks stemming from volatile global commodity markets and anticipated increases in domestic water and electricity tariffs."For 2025, our analysis indicates that inflation will likely average around 4.5%, with a 2.3% moving average over the medium term," FNB said. "However, the balance of risks leans towards higher inflation due to persistent geopolitical tensions, the unpredictability of global commodity markets, and the expected rise in domestic utility costs."Recent data shows a rise in headline inflation to 4.2% year-on-year in March 2025, up from 3.6% year-on-year in February. This increase was primarily fueled by higher prices in key categories such as food, housing, transport, and alcoholic beverages. Despite this upward trend, FNB notes that current inflationary pressures remain moderate compared to historical levels.The Bank of Namibia's recent decision to maintain the repo rate at 6.75% was in line with FNB's expectations and mirrored the earlier stance taken by the South African Reserve Bank."As anticipated, the Bank of Namibia's (BoN) Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 6.75% during its April meeting. This decision aligns with the South African Reserve Bank's (SARB) March announcement to hold rates steady," FNB said. "The MPC cited prevailing global uncertainties, stable domestic inflation, and adequate foreign exchange reserves as the primary factors influencing its decision."However, the central bank did flag a notable decrease in foreign exchange reserves, which fell to N$59.7 billion in March from N$64.3 billion in the preceding quarter. Despite this decline, the BoN MPC reassured that the current reserve levels remain sufficient to uphold the Namibian dollar's peg to the South African rand and meet the country's international payment obligations.

Namibia's inflation to average 4.5% in 2025, says FNB

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Namibia's inflation to average 4.5% in 2025, says FNB

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