WINDHOEK – Namibia's annual inflation rate dropped further to 4.7 percent in January from 5.1 percent in December, according to the country's statistics agency on Thursday. 

The drop in  the inflation rate brings another relief to consumers as well as the business sector, said Klaus Schade, a research associate with the Economic Association of Namibia, in an analysis of the downward trend. 

 "The contraction in the economy certainly helped contain rental price increases at levels last seen in 2015. Lower global oil prices contributed further to the lower inflation rate," he said. 

 According to Schade, however, not all households will benefit to the same extent from the slowdown in price increases.

"Poor households that spend most of their income on food, and a lower share than the average household on transport and rent in particular in rural areas, will struggle more to make ends meet. With the existing dry spell, we expect food prices to remain under pressure," he said. 

 According to Schade further price increases for alcoholic beverages and tobacco products can be expected this month with the annual increase in excise duties. 

Schade is of the view that despite upward price pressure in some categories, inflation is expected to remain well within the 3 percent to 6 percent band targeted by the South African Reserve Bank, therefore given the economic climate, interest rate increases are unlikely this year.