WINDHOEK, 13 JUN – Annual inflation fell to 3.6 per cent during the first four months of 2018, from 7.4 per cent during the corresponding period in 2017.
“This is good news as it means there was a decline in the inflation of the food and non-alcoholic beverages, as well as housing, categories,” Bank of Namibia Governor Ipumbu Shiimi said during the Monetary Policy Announcement here on Wednesday.
On the downside, the increase of fuel prices caused inflation for the transport category to rise during the same period.
“On a monthly basis, the inflation rate rose slightly to 3.6 per cent during April 2018, from 3.5 per cent in the previous month,” Shiimi said.
The governor also noted that inflation is expected to average around 4 per cent as predicted.
The annual growth in Private Sector Credit Extension (PSCE) also declined to 5.7 per cent in 2018, comparing to last year’s 7.8 per cent, while international reserve stock remained sufficient.
“The slower growth in PSCE is due to reduced demand for credit by the household and corporate sectors, especially in the form of mortgage, overdraft and installment credit.”
Shiimi however highlighted that although reserves remain sufficient to sustain the currency peg between the Namibian Dollar and the South African Rand, it is relatively low compared to Namibia’s peers in the Southern African Development Community (Sadc).
“As at 31 May 2018, the official stock of international reserves stood at N.dollars 28.1 billion, representing a decline of N.dollars 2.6 billion on a monthly basis,” Shiimi stated.
He said at this level, international reserve stock is projected to cover only 4.7 months of imports of goods and services, as opposed to the six months which is the average level for other Sadc members.