Trade deficit rockets 41.9%
This week, the Namibia Statistics Agency reported that the trade deficit had spiked upward 41.9% in the second half of 2015 as measured against a comparative period in the second half of 2014, recording a deficit valued at N$9.85 billion in the second quarter of 2015.
Said the agency, “this translates into a growth of 41.9%, up from the N$6.94 billion when compared to the same quarter a year ago.”
Commenting on the trade figures, Simonis Storm Securities analyst James Cumming said, “The widening trade deficit was mainly due to a decline in export revenue. The overall value of exports fell by 39 percent, which is 19 percent more than the decline in import expenditure, which fell by 20 percent. However, the fall in imports was not enough to offset the deficit.
Added Cumming, “export revenue in the second quarter of 2015 was N$8.8 billion less than what was recorded in the second quarter of 2014, which stood at N$22.7 billion, similarly, expenditure on imports were N$5.9 billion less than what was reported in the second quarter of 2014, which was valued at N$29.7 billion. The widening deficit continues to underscore Namibia’s dependence on imports, and her vulnerability to any slowdown in supply from her largest trading partner, South Africa.”
Releasing inflation numbers this week, the Namibia Statistics Agency reported that annual inflation gained slightly in July to 3.3% against the 3% recorded in June. The increase in annual inflation was attributed to increases in the price levels of the categories of ‘Hotels, cafés and restaurants’ and ‘Food and non-alcoholic beverages’ which increased to 7.5% and 5.3% respectively.
On a monthly basis, inflation increased 0.4% in July. According to the NSA, the rise in the inflation rate resulted from increases in the prices of goods and services of the categories ‘Hotels, cafés and restaurants’ and ‘Transport’, increasing 1.8% and 1.4% respectively.
The annual inflation for food and non-alcoholic beverages category stood at 5.3% according to the NSA.
Expressing its view, Simonis Storm said about its inflationary outlook, “we still anticipate that the increase in water and electricity tariffs at the beginning of July 2015 to have a significant effect in the Housing, Water, Electricity and gas category and because it carries the largest weight to impact aggregate inflation in the coming months. The water shortage in Namibia might have a significant impact on inflation in the near future. We still expect significant increases in food inflation with price hikes announced by the wheat and chicken industries recently, which partly came about from the new 5% import levy imposed by the Namibian Government on wheat and white maize products.”