Price monster suffers bout of Octoberitis
Transport inflation again shifted into a higher gear last month, driving overall inflation to its level so far this year.
Jo-Maré Duddy – Spiking fuel prices continued to be the tiger in inflation’s tank with the overall annual rate accelerating to 13.6% in October, marking its second consecutive month at double-digit levels.
Transport inflation, current the highest since 2010, was the main driver behind the overall inflation rate increasing from 4.8% in September to 5.1% last month, the steepest so far this year and slightly below the 5.2% a year ago.
Sugar soured the declining trend that overall food inflation has enjoyed since June this year. Following five consecutive months of deflation, the inflation rate for sugar, jam, honey, syrups and sweets rose by 5.3 percentage points to 2.8%.
Overall food inflation crept up from 2.6% to 3.0%, according to the latest data released by the Namibia Statistics Agency (NSA) yesterday.
The inflation rate for the operation of personal transport equipment, which includes fuel prices, continued picking up pace. It rose from 13.3% in September to 15.5%, marking its fourth consecutive month at double-digit levels. A year ago, the rate was 4.7%.
Following the increase in taxi and municipal bus fares, the inflation rate for public transportation services remained unchanged at 18%.
According to Klaus Schade, a research associated at the Economic Association of Namibia (EAN), the operation of personal transport equipment and public transportation services account for 9.0% and 2.4% respectively of the total inflation rate.
Fuel price
The rise in global oil prices, coupled with the depreciation of the Namibian dollar versus the greenback has resulted in six and seven consecutive petrol and diesel price increases in Namibia since June and May respectively, Schade said.
Compared to November 2017, petrol is 24.7% more expensive, while the price of diesel increased by 28.9%, he said.
Commenting on last week fuel price increase of 50c/l for petrol and 70c/l for diesel, Schade said rising prices will lead to higher transportation costs and over time to price adjustments for consumer products. The inflation rate will therefore continue to rise.
Schade reckons local producers competing with imported products could gain a competitive edge due to shorter transport distances. “Therefore, sourcing inputs and final products locally could help containing the upward price pressure,” he said.
However, there could be some relief on the horizon regarding the fuel price, Schade said yesterday.
“Global oil prices have, despite sanctions on Iran as one of the main oil exporting countries, weakened from a spike at US$86 per barrel (4 Oct. 2018) to some US$73 per barrel in recent days. Combined with a more stable exchange rate, this could contain further fuel price increases even though government will try to recover losses of the National Energy Fund of close to N$500 million over the past months,” he said.
Transport inflation, current the highest since 2010, was the main driver behind the overall inflation rate increasing from 4.8% in September to 5.1% last month, the steepest so far this year and slightly below the 5.2% a year ago.
Sugar soured the declining trend that overall food inflation has enjoyed since June this year. Following five consecutive months of deflation, the inflation rate for sugar, jam, honey, syrups and sweets rose by 5.3 percentage points to 2.8%.
Overall food inflation crept up from 2.6% to 3.0%, according to the latest data released by the Namibia Statistics Agency (NSA) yesterday.
The inflation rate for the operation of personal transport equipment, which includes fuel prices, continued picking up pace. It rose from 13.3% in September to 15.5%, marking its fourth consecutive month at double-digit levels. A year ago, the rate was 4.7%.
Following the increase in taxi and municipal bus fares, the inflation rate for public transportation services remained unchanged at 18%.
According to Klaus Schade, a research associated at the Economic Association of Namibia (EAN), the operation of personal transport equipment and public transportation services account for 9.0% and 2.4% respectively of the total inflation rate.
Fuel price
The rise in global oil prices, coupled with the depreciation of the Namibian dollar versus the greenback has resulted in six and seven consecutive petrol and diesel price increases in Namibia since June and May respectively, Schade said.
Compared to November 2017, petrol is 24.7% more expensive, while the price of diesel increased by 28.9%, he said.
Commenting on last week fuel price increase of 50c/l for petrol and 70c/l for diesel, Schade said rising prices will lead to higher transportation costs and over time to price adjustments for consumer products. The inflation rate will therefore continue to rise.
Schade reckons local producers competing with imported products could gain a competitive edge due to shorter transport distances. “Therefore, sourcing inputs and final products locally could help containing the upward price pressure,” he said.
However, there could be some relief on the horizon regarding the fuel price, Schade said yesterday.
“Global oil prices have, despite sanctions on Iran as one of the main oil exporting countries, weakened from a spike at US$86 per barrel (4 Oct. 2018) to some US$73 per barrel in recent days. Combined with a more stable exchange rate, this could contain further fuel price increases even though government will try to recover losses of the National Energy Fund of close to N$500 million over the past months,” he said.
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