Fuel prices fire up inflation

Higher fuel prices pushed transport costs sharply higher in August, becoming the biggest source of inflationary pressure as Namibia’s annual inflation rate accelerated to 5%.

The transport category, which accounts for 14.3% of the consumer basket, recorded annual inflation of 13.2%, compared with deflation of 1% in August 2025.

Transport prices also rose sharply on a monthly basis, increasing 3.7% in August after falling 3.1% in July.

The increase was driven largely by the cost of operating personal vehicles, as well as public transport.

Inflation for the operation of personal transport equipment rose to 17.1%, from a deflation of 2.8% a year earlier. In this category, prices of petrol and diesel recorded 25.1% inflation versus a fall of 7.2% in August 2025.

Licence and registration fees also increased, with inflation rising to 8.7% from zero a year earlier.

The increase in fuel costs came against a backdrop of renewed volatility in global oil markets, including concerns over disruptions around the Strait of Hormuz, a major route for global oil shipments.

Effects extend far beyond motorists 

The impact was not confined to motorists.

Public transport services recorded annual inflation of 14.9%, up sharply from 1.0% a year earlier. Taxi transportation recorded inflation of 15.4%, while rail transport rose 15.6%.

Air transport recorded inflation of 17%, while bus transport increased by 12.6%.

The sharp increase in transport costs made the category the largest contributor to Namibia’s overall annual inflation rate, adding 2 percentage points to the 5.0% headline rate.

Housing, water, electricity, gas and other fuels contributed a further 1 percentage point, while food and non-alcoholic beverages contributed 0.8 percentage points.

The fuel-driven increase stands out because price pressures elsewhere in the consumer basket were more moderate.

How did this affect the shopping basket?

Food inflation eased across several major categories compared with a year earlier.

Fish inflation slowed to 3.7% in August from 8.3% in August 2025, while meat inflation fell to 3.8% from 8.3%.

The slowdown was particularly pronounced in beef, where inflation declined to 3.7% from 13.7%. Sausages moved into deflation of 0.7%, compared with inflation of 9% a year earlier. Bacon prices also fell 2%, against inflation of 3.1% previously.

Oils and fats recorded inflation of 1.8%, down from 6%, as cooking oil inflation fell sharply to 0.5% from 8.1%.

Coffee, tea and cocoa inflation also moderated to 3.5% from 7.2%, with coffee prices rising 3.3%, compared with 12.7% a year earlier.

Housing costs, however, continued to exert pressure. The category, which carries the largest weight in the consumer basket at 28.4%, recorded annual inflation of 4.3%, up from 3.4% a year earlier.

Electricity, gas and other fuels recorded inflation of 4.1%, compared with 1.6% a year earlier. Regular maintenance and repair of dwellings rose to 4.0% from 2.0%, while rental payments increased to 4.3% from 3.7%.

Despite the annual increase, housing costs fell on a monthly basis, recording deflation of 0.4% in August compared with inflation of 0.8% in July.

Regional price creep

The impact of transport costs was also evident across the country's inflation zones.

Khomas recorded the highest annual inflation rate at 5.9%, up from 2.9% a year earlier, with transport inflation rising to 14.4% from -1.9%.

Zone 3 recorded inflation of 5.2%, compared with 3.2% a year earlier, while transport inflation increased to 13.3% from -2%.

Zone 1 had the lowest annual inflation rate at 4%, up from 3.6%, with transport inflation rising to 12.2% from 0.3%.

National monthly inflation increased to 0.6% in August from 0.1% in July.

Core inflation, which strips out some of the more volatile price movements, stood at 3.8%, below the headline rate.