By: Josef Kefas Sheehama
Expectations about future inflation play a crucial role in influencing current decisions on consumption and investment.
Therefore, the long-term relationship between household savings and anticipated inflation is evident from the cointegration test.
Despite some moderation in fuel costs, inflation remained uncomfortably rapid in Namibia, with an annual rate of 6% in October 2023.
The constant fuel prices is worth noting, but it does not represent the full picture about inflation in the country.
With the rising cost of living, just comparing your electricity cost to the actual units could be enough to send you into a coma.
When you consider the persistent increase in fuel prices coupled with global oil prices, transport costs and domestic taxation, you will begin to understand how inflation has affected the domestic market from commodities to business operational costs.
Therefore, the growing inflation has the capability to worsen the deep economic gap between the rich and poor in Namibia, a problem that has already been exacerbated by the global Covid-19 pandemic and the Russia-Ukraine war.
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