Namibia in Numbers: How the cost of living evolved in 2025

INFLATION slowed in 2025, and prices did not rise as fast throughout the year as in recent years, with the Namibia Consumer Price Index (NCPI) suggesting that the cost of living for the average Namibian increased by 3.2% at the end of December relative to the start of the year.

While the headline CPI path in 2025 looked broadly similar to 2024, the underlying behaviour of prices differed sharply.

In 2024, prices for most goods and services generally kept climbing as the year progressed, with several major baskets accelerating in the second half of the year.

In 2025, the opposite pattern appeared in many categories – several household baskets flattened out in the second half of the year, and some key items even recorded outright declines from their mid-year prices, ulimately meaning the cost of living rose more slowly and less broadly than it did in 2024.

Food and non-alcoholic beverages drove much of inflation early in 2025, but this faded as the year progressed.

Food inflation ended the year at 2.6%, the lowest since early 2020, with broad-based easing across categories and some baskets moving into deflation.

For the first time since 2010, milk, dairy and eggs ended the year cheaper than the previous year, while bread and cereals also recorded lower end-year prices.

Alcohol and tobacco also contributed less as the year went on, partly due to volatile beer prices and relatively modest increases in spirits and tobacco.

Housing and utilities became the standout inflation pressure late in the year. Rent price increases in the final quarter pushed the basket to 4.5% in December, making it the highest-inflation major basket at year-end.

Transport inflation remained moderate, as fuel prices were kept relatively stable for most of the year, supported by lower global oil prices and a stronger rand.

Despite the improvement in headline inflation, core inflation (which excludes volatile items such as food and fuel) remained above headline inflation during 2025, showing that underlying price pressures increasingly shifted away from tradable, commodity-linked items and towards stickier, domestically driven costs such as services and rents.

However, it should be noted that Namibia’s current CPI basket is becoming severely dated. The basket was introduced in 2013, and is still based on household spending patterns from the 2009/10 Namibia Household Income and Expenditure Survey. The intended update after the 2015/16 survey could not proceed due to methodological problems, and a new survey is currently underway, with the next basket update expected around 2027. This matters because changes in household consumption patterns, particularly Namibia’s rapidly rising urbanisation and shifting budget shares across essentials, could lead to noticeable changes in basket weights and the measured inflation profile once the new basket is implemented.

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