The Bank of Namibia (BoN) this week increased the repo rate by 50 basis points, and this has made inflation the main talking point in households.

By historic standards, inflation is not at its highest, but it has become a more prevalent issue in 2023 than it was in 2016/17.

The head of research at Cirrus Capital, Robert McGregor, believes this is because inflation this time around affected lower-income households.

"Lower income households disproportionately spend far more of their income on food than more wealthy households, and where we have been seeing price inflation, food and non-alcoholic beverages are one of the key drivers of inflation, and we, unfortunately, live in a society where there is a lot of inequality and a lot of poverty, so where you do have food inflation, obviously it's going to hit lower-income households much harder. That's why inflation is so much more of a talking point."

McGregor says that inflation in 2016 was around the same level, but because it only affected rent, it was an isolated problem.

"We were living through fairly high inflation in the 2016–2017 era; I don't seem to recall as much of a concern then as I am seeing now. Historically, we have had higher inflation than what we are seeing now."

This he describes as an issue because inflation has touched on daily needs as opposed to something that can be substituted at the moment.

The economist stressed that seeing that the majority of people live in low-income households, inflation has now become an issue among the masses.