Causes of Inflation in Namibia: An Empirical Exploration

This paper sets out to establish possible causes of inflation in Namibia. These are: growth in Namibia’s money supply, aggregate demand and domestic costs of production; and pass-through of South Africa’s prices and costs to domestic prices in Namibia. This paper argues that inflation in Namibia is caused by a combination of monetary and structural factors. The paper recommends the following strategies:optimal mix of monetary and fiscal policy measures; exploration of Namibia’s import substitution possibilities; reduction of monopolistic and oligopolistic powers in manufacturing and trade; and increase labour productivity, as a means of reducing average cost of production.