Domestic economy performance satisfactory
Releasing its quarterly bulletin for the third quarter of 2014, the domestic performance displayed a satisfactory performance according to the Bank of Namibia, reflected in the secondary and tertiary industries.
Construction spurred the secondary industry, sustaining positive performance while activities in the manufacturing sector slowed during the review period.
The tertiary industry maintained a positive momentum supported by improved sales across the wholesale and retail sub-sectors.
The average headline inflation rate slowed during the third quarter of 2014, reflected in lower inflation rates for food and non-alcoholic beverages, transport and housing categories.
The average inflation slowed to 5.4% during the third quarter of 2014. For the comparative period, the inflation rate equalled 5.8%.
Growth in credit aggregates slowed, in line with interest rate increases witnessed in June and August, bringing the total rate hike witnessed in 2014 to 50 basis points to end of at 6% for 2014.
According to the Bank of Namibia, private sector credit extension slowed on a weakly basis due to weak demand for credit from business.
The Balance of Payments recorded a surplus during the third quarter of 2014, compared to a deficit recorded for the comparative period in 2013 mainly due to increased capital inflows in the financial account.
The current account in contrast registered a deficit due to a widened merchandise trade deficit and higher net service payments.
Going forward, global growth is expected to remain flat in 2014. Commodity prices declined posing a challenge to Namibia’s export earnings.