Economy continues to defy expectations
Senior Manager Research and Development | FNB Namibia Holdings, Namene Kalili, said the figures are well above market expectations and their own expectations, where they had forecast growth of 4.9%.
He said that therefore the economy continues to defy expectations amidst significant headwinds emanating from the global economy. “These headwinds have negatively affected the export sectors,” he added..
“However, strong domestic demand in the trade, financial, construction, water and electricity sustained excellent growth amidst the global economic slowdown. Economic growth benefited from low inflation (3.5%) and even lower change in the GDP deflator (0.1%),” he said.
Kalli said the GDP deflator measures the inflation of our export commodities. Although savings rate is down slightly, it is in relation to the rising interest rate environment and was to be expected, while investment expenditure grew to N$49 billion.
He said, the growth in investments over and above the slowdown in savings rate, indicates that the economy was able to attract significantly higher FDI in 2015. “From a sectoral perspective, agriculture contracted by 10%, while mining was flat, despite the massive increase in gold production. Strong construction, water and electricity growth ensured that the secondary sectors grew by 8%, while the rest of the secondary sector performed dismally. The tertiary sectors decelerated to 5.9% growth, reflective of most sub components performance, with public administration and defence posting the highest growth,” he said.
Meanwhile, Kalili said, growth will decelerate in 2016 due to the pronounced impact of the global economic slowdown, limited economic stimulus from government, rising interest rates and the eminent SA downgrade to junk status. “The slowdown is transitory, recovering mildly in 2017 and returning to high growth in 2018,” he added.
Furthermore, he said, the economic slowdown is the opportune time to sharpen our pencils and rethink our growth strategy. “The country is blessed with natural sun and embracing solar energy and liberalising the energy sector to allow competitive development and revolutionise the country’s energy sector into one of the biggest contributor to economic growth. The economy needs to rebalance from a consumption led to an export led economy. This would ensure that the economy produces more than it consumes, resulting in massive increases in savings and investments and therefore unlock long term development of new industries.”