NAMIBIA: Headline inflation increased to 4.7 percent y/y (against our 4.6 percent expectation) in August from 4.5 percent in July.
On a month-on-month basis, inflation printed at 0.4 percent. The increase in the headline number was driven by inflationary pressures in the alcohol and tobacco (7.9 percent y/y), hotels, cafes and restaurants (7.8 percent), and clothing and footwear (2.0 percent) categories. Food and non-alcoholic beverage inflation, decreased from 10.5 percent y/y in July to 10.0 percent in August, with lower inflation evident across six of the 12 subcategories.
The transport category remains in deflation (contracting 2.2 percent from a contraction of 2.5 percent in July) as base effects from lower fuel prices remain prominent, following unchanged fuel prices for much of the year. We anticipate upside pressure in inflation for the remainder of the year and we expect inflation to average 5.9 percent y/y this year, ending the year above 5.0 percent.
