WITHIN the past 12 months, the price of food and alcohol has increased, which has reduced the dollar’s value at a faster rate than usual, and as a result has diminished the purchasing power of households.
This was reflected by the Namibia Consumer Price Index, which was released by the Namibia Statistics Agency (NSA) last week.
The index is used to calculate the rate of inflation or price movement as experienced by consumers.
By the end of March this year, the annual inflation rate has increased by 3,1%, compared to 2,4% recorded in March last year.
This means the price of basic items in the country has increased faster than last year.
“The growth in the annual inflation rate for March 2021 was mainly as a result of increases recorded in the price levels of food and non-alcoholic beverages,” the agency last week reported.
The price hike experienced in the food and non-alcoholic beverages category, as compared to last year’s 2,9%, has increased at a rate of 6,6% by the end of March 2021.
The NSA could, however, not say whether the inflationary pressure on food items originated from the domestic economy or whether this was due to imports, and whether it was the result of supply or demand.
Consumers are not only expected to adjust their disposable income with regards to food items, but also to alcohol and cigarettes.
The price of alcoholic beverages and tobacco products has jumped from a 2% increase last year to a 3,8% increase by the end of March 2021.
This means retailers selling alcohol and tobacco-related products have been increasing their prices at a rate of 3,8% in the past 12 months.
Communication services have responded to the increasing demand for broadband by increasing their prices concurrently.
According to the NSA, the oligopoly-characterised communication market has increased its prices faster than last year – from 1,1% to 3,3% by the end of March this year.
The only category which has contributed negatively to the overall inflationary rate in the past year is clothing and footwear, which can be seen as luxury goods.
However, with winter approaching, the negative changes are expected to move into positive territory as clothing becomes a necessity.
The NSA also indicated that, apart from food items that are deemed a necessity, the price of housing, water, electricity, gas, and other fuels has also increased, with the exception of rental prices.
The cost of housing, water, electricity and fuel has increased by 1,1% by March this year, compared to -0,3% registered in March last year.
For the past two months, the housing, water, electricity, and fuel category has contributed 0,4% and 0,3% to overall increases.
The Ministry of Mines and Energy has been delivering bad news on pump prices since the beginning of 2021.
The inflation rate has increased 0,5% on a monthly basis, compared to 0,4% recorded a year earlier.
The current inflation breakdown shows there is no relief for consumers as the cost of almost all basic goods and services is going up at a constant or faster rate than before.
The same has, however, not been observed with regards to remuneration in the country.
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