The RMB Global Markets Research, Sub-Saharan Africa Outlook dated 28 May 2015 was released last week. Namene Kalili, Senior Manager Research and Development at FNB Namibia Holdings always compiles the Namibia report and informed that RMB had revised the growth estimates upwards to 4.9% in 2015 and expected a gradual increase over the next two years. He said, “The revision was due to unexpectedly higher growth in consumer demand so far this year.
However, agricultural output was changed downwards after a disappointing rainy season and significant layoffs in the agricultural sector.” Kalili added in the Namibian section of the report that growth was decoupling from South Africa on the back of strong construction, mining and electricity sector growth. “Nevertheless, possible electricity supply shortages, low export commodity prices and rising inflation pose downside risk to the economic outlook,” he stated. Fitch Ratings has affirmed Namibia’s sovereign rating at ‘BBB-’ with a stable outlook. The agency cited continued strong growth driven by robust domestic demand and including high public and private investment. It expects the trend to continue in 2016 as a result of increases in uranium and gold output, as well as a positive performance in the construction and retail sectors. Regarding inflation Kalili advised that headline inflation dropped to 2.9% y/y in April from 3.4% in March, mainly due to price deceleration in food and non-alcoholic beverages, transport, communications and recreation – transport disinflation remained the driver for low inflation. “This has prompted a downward revision of our inflation to 5.1% for the year. Regardless of the deceleration, inflationary pressures remain. Near term data suggests inflation is bottoming out and is expected to pick up as electricity hikes and rising fuel prices are factored into the economy,” he added. On monetary policy Kalili said the benchmark rates remained unchanged at the last MPC meeting in April.