The Bank of Namibia this week projected that Namibia’s real Gross Domestic Product growth would close at 5% and 5.5% in 2015 and 2016 respectively.
This was based on the IMF’s outlook, with the global economy expected to strengthen. Growth according to the central bank will be driven by construction on the private and private sectors, increased mining output from new mines, supported by the slight recovery in international mineral prices and projected increases in manufacturing activities. “Short-term risks, however, remain elevated, due to augmented geopolitical tensions and the effects of normalisation of the United States monetary policy. Monetary policy stances are still very accommodative and that is expected to change in 2015, with interest rate hikes expected later part of the year,” said the Bank of Namibia. Added the Bank of Namibia, “the projected recovery in uranium mining is partly dependent on the assumption that international prices for uranium mining will continue to recover.” Another worrying factor for the central bank was the agricultural sector which is on a long road to recovery. “Adverse weather conditions are expected to restrain growth in the agricultural sector, which is only expected to grow positively in 2016. Furthermore, electricity supply constraints that started in South Africa could spill over to the Namibian economy and could restrain growth. The negative decline of the oil price on the Angolan economy is also likely to have a dent on Namibia’s growth, mainly through wholesale and retail trade,” said the Bank of Namibia.