Fuel pain pushes inflation to 4.1%
Namibia's annual inflation rate accelerated to 4.1% in May, up from 3.1% in April and more than double the 2.1% low recorded in March, according to figures cited by economic research firm Simonis Storm.
The reading is the highest since March 2025 and confirms that March marked the bottom of the country's recent disinflation cycle, with prices now rising at the fastest pace in two years on a month-on-month basis. Monthly inflation came in at 1.2% for the second consecutive month, the strongest back-to-back increase since 2024.
Simonis Storm said the jump was being driven overwhelmingly by transport costs, which rose 11.5% year-on-year and have overtaken housing as the biggest single contributor to headline inflation. Transport added 1.7 percentage points to the overall figure, more than four times its contribution in April, and a sharp turnaround from the 0.2 percentage point drag it represented a year ago.
Housing, water, electricity, gas and other fuels rose 4.9% and added 1.2 percentage points, while food inflation of 2.0% contributed a further 0.4 points. Together, the three categories accounted for 3.3 of the 4.1 percentage points making up headline inflation.
Core inflation, which strips out volatile food and energy prices, rose to 3.1% from 2.8%. Simonis Storm noted that while this remains well below the headline rate - confirming the inflation spike is still being driven by fuel and food rather than broad demand, the gap is narrowing. Services inflation reached 4.2%, while goods inflation jumped to 4.0% from 2.8%, nearly converging with services for the first time since the fuel shock began, a sign that second-round price effects may be building.
Squeeze on households
The pressure on lower- and middle-income households is becoming more visible. Clothing and footwear inflation has flatlined at 0.0% and alcoholic beverages slowed to just 0.9%, which Simonis Storm said points to households cutting back on discretionary spending as transport, housing and food absorb a growing share of budgets. Taxi fares have risen 15%, while fuel prices sit at record levels.
Electricity and rents add to housing strain
Housing inflation climbed to 4.9% from 4.4%, driven by electricity, gas and other fuels rising to 7.0% from 4.0% the previous month - a sharp swing from a 1.1% decline a year earlier.
Official rental inflation held steady at 4.7%, but Simonis Storm said the situation on the ground is more severe. In high-demand Windhoek suburbs including Klein Windhoek, Kleine Kuppe and Windhoek Central, tenants are reporting lease renewals of 20-40%, far above the traditional 10% annual escalation. The firm said available rental listings in these areas have fallen from over 1,500 units in mid-2023 to just 218 by mid-2025, handing landlords significant pricing power in a market where average rent now stands at around N$7,600 a month.
As the largest weighted component of the consumer price basket at 28.4%, housing continues to set a floor under inflation, Simonis Storm said. NamPower's pending application for an 8.4% electricity tariff increase for 2026/27, along with a 5% service tariff rise approved by Swakopmund Municipality and expected similar moves elsewhere, point to further upward pressure on administered prices.
The government's move to revive Rent Control Boards and draft new legislation reflects the scale of the affordability crisis, though the process remains at an early stage. Simonis Storm said that as long as housing inflation stays in the 4.5-5% range, headline inflation is unlikely to fall sustainably below 3%.
Windhoek hit hardest
Regional divergence widened sharply in May. Khomas region recorded inflation of 5.4%, well above the national average, with transport surging from -0.2% to 12.8% and furnishings and household equipment rising 8.1%. Simonis Storm attributed this to Windhoek's high concentration of formal-sector commuters and vehicle-dependent households.
The //Kharas, Erongo, Hardap and Omaheke region recorded inflation of 3.6%, while the northern regions came in lowest at 3.2%, cushioned by slower food inflation of 1.3% compared with 5.4% in Khomas, as locally produced staples partially shield rural consumers from import-driven price increases.
