AVERAGE inflation in Namibia fell to 5,4 per cent in 2010, down from 8,8 per cent in 2009 and the lowest in four years.
The 2010 rate became official after the Central Bureau of Statistics (CBS) released the annual inflation for December, which showed further easing from 3,4 per cent in November to 3,1 per cent.Average inflation last reached such low levels in 2006, when the rate was 5,1 per cent. The years afterwards curbed steadily upwards with average inflation coming in at 6,7 per cent in 2007, followed by 10,3 per cent in 2008.The low rate of 2010 is, however, still significantly higher than the 2,3 per cent of 2005.Last year’s relief is likely to be short-lived though, local economists believe. Their average inflation forecasts for 2011 range from 5,0 per cent to 5,7 per cent.’Inflationary pressure will return in 2011,’ FNB Namibia economist Daniel Motinga said. He expects average inflation of 5,2 per cent this year, before leaping to 7,0 per cent next year on the back of global economic recovery. Investment House Namibia (IHN) is forecasting an average rate of 5,4 per cent for 2010, while the Standard Bank Group’s economic desk is looking at 5,7 per cent.Bank Windhoek economist John Steytler expects an average inflation rate of 5,0 per cent this year. Steytler said his longer term inflation outlook has deteriorated since last September, when he forecast 4,5 per cent for 2011, because of the rapid increase in global food price inflation.’Food price inflation constitute almost 30 per cent of the total consumption basket of the average Namibian household, and a rapid increase in this component will therefore have an impact on overall inflation,’ he said.
