- Food and non-alcoholic beverages remain largest contributors to Namibia’s inflation
- Analysts say easing cost pressures signal stability for investors, though risks remain
WINDHOEK, NAMIBIA – Namibia’s annual inflation slowed to 3.2% in August 2025, the lowest reading so far this year, as food prices moderated and transport costs provided relief.
The figure compares with 4.4% in August 2024 and remains well below the Bank of Namibia’s 4.0% watch level.
“Food and non-alcoholic beverages remained the largest contributor, adding 1.0 percentage point to the headline figure,” investment firm Simonis Storm said in its latest report. The category rose 5.2% year on year, with bread and cereals recording the strongest pressures.
Cost of living in focus
Mirjam Shihepo, spokesperson for the Namibia Statistics Agency (NSA), said the slowdown means the cost of a representative consumer basket increased only marginally over the year.
The annual inflation rate of 3.2% implies that on average prices of consumer goods have gone up by 3.2%, Shihepo told Allen Dreyfus. If a basket cost a consumer N$1.00 in August 2024, the same basket cost N$1.032 in August 2025.”
She added that Namibia still ranks relatively high in Africa’s cost of living comparison, according to the Economic Intelligence Unit’s Worldwide Cost of Living Index. Seychelles, Mauritius, South Africa and Kenya remain the most expensive, while Malawi, Mozambique and Niger are among the cheapest.
“For the Southern African Development Community (SADC) and Africa at large, this serves as a comparative indicator that gauges how Namibia’s cost of living compares to other countries,” Shihepo said. “Additionally, the 3.2% inflation rate for August 2025 can be used to rank Namibia’s position on the list of African countries.”
For foreign investors, she argued, the current rate reinforces confidence. “The inflation rate in Namibia shows that the Namibian economy is stable and that their investments are safe. Additionally, the inflation rate assures investors of their sustained living standard,” she said.
Analysts see stability but warn of risks
Simonis Storm economist Almandro Jansen said the reading highlights continued moderation in price growth. “Inflation eased further to 3.2% year on year in August 2025, down from 4.4% in August 2024 and slightly below the 3.5% recorded in October 2023,” he said. “This marks the lowest reading so far in 2025, underscoring the continued moderation in price growth.”
He explained that the slowdown reflected the combined effect of last year’s high base and easing pressures across key expenditure categories. “On a year-to-year basis, inflation averages 3.6%, in line with the twelve-month average of 3.4%,” Jansen added.
Still, he cautioned against complacency. “Key factors to monitor include seasonal food price volatility, the lagged impact of global commodity price swings, US tariffs on global trade flows and domestic tariff adjustments in electricity and municipality services,” Jansen told Allen Dreyfus.
Transport costs provided an unusual cushion, recording a -1.0% decline year on year in August due to lower fuel prices. But Jansen said the reprieve may not last.
“This drag in inflation will fade as we move closer to year-end. Base effects from last year’s fuel declines are already softening, while Brent crude remains vulnerable to OPEC+ supply cuts and geopolitical uncertainty. If oil prices or the Namibian dollar move unfavourably, fuel costs could rebound, pushing transport inflation into positive territory,” he warned.
With inflation still subdued, Namibia maintains an advantage among African peers, analysts say, but the country remains exposed to swings in global markets that could test the durability of its price stability.
