Namibia’s annual inflation rate declined year on year but rose quarter on quarter in the first quarter of 2025, largely due to increased transport costs, the Bank of Namibia (BoN) reports.
In its latest quarterly review, the central bank states that headline inflation rose to 3.7% during the first quarter, up from 3.1% in the preceding quarter.
The rise was mainly driven by the “operation of personal transport equipment and vehicle purchases” while food inflation also edged slightly higher, notes BoN.
However, in year-on-year terms, inflation decelerated by 1.3 percentage points, falling from 5.0% in the first quarter of 2024 to 3.7% in the first quarter of 2025. This disinflationary trend was primarily due to sharp declines in both transport and housing inflation.
According to BoN director of strategic communications and international relations Kazembire Zemburuka: “The moderation in annual inflation reflects easing price pressures in key categories, particularly transport, which saw significant contraction compared to the same period last year.”
The report also indicates that overall inflation eased to 3.5% in May 2025, slightly down from 3.6% in April, further reinforcing the trend of declining annual inflation, despite monthly fluctuations.
Meanwhile, broad money supply registered a positive uptick in the same quarter, supported by rising net foreign assets and increased domestic credit demand, particularly from non-financial corporations.
Zemburuka says: “The rise in broad money supply was largely underpinned by higher domestic claims, as well as a recovery in credit appetite among businesses, benefiting from a relatively accommodative monetary policy stance.”
Furthermore, the BoN notes that money market rates trended downward, following a reduction in the repo rate, which contributed to an increase in liquidity within the banking system.
“Increased government expenditure, including the redemption of government securities and disbursement of social grants, also added liquidity to the financial system,” Zemburuka adds.
