RMB Economic Breakfast meet zooms in on Brexit
RMB Namibia held its bi-annual Economic Breakfast recently which ran under the theme, Brexit, with the purpose to provide relevant economic insight from the Global and local markets by credible economists.
The presenting economists were Isaah Mhlanga from RMB South Africa who focused on the Global Markets and economic implications on South Africa. Namene Kalili from FNB Holdings provided economic insights on Namibia.
Namene Kalili Senior Manager Research and Development said, “with Brexit, there are opportunities to increase export, while reducing imports to and from the UK. With Fitch having downgraded the outlook for Namibia, fiscal consolidation will be the order of the day, which poses downside risks of course. We have therefore revised our outlook downwards and particularly in 2020, but at this stage the government should have sufficient fiscal space to deploy countercyclical fiscal policies. In as much as Q2 GDP numbers surprised to the downside, one bad data print does not signal a recession.”
Meanwhile, Isaah Mhlanga, RMB SA Economist said, “the global economy will continue to muddle through, with modest economic growth in the United States while Europe is weighed down by the uncertainty brought surrounding the Brexit vote and the possibility of Copy Cats by other EU countries where anti-EU sentiment has risen. Growth in emerging markets seems to have stabilised, particularly in China following stimulus, however, the risk of a debt crises still lingers.
“We see three implications of Brexit on the global economy. First, trend global growth will be lower over the next five years compared to the previous 10 years. Second, global monetary policy will remain very accommodative, except in the US where we expect that the US Fed will hike rates in December. Third, commodity prices are set to gradually rise over the next two to three years but they will not return to the pre-financial crisis year’s levels. Lastly, emerging markets will continue to receive portfolio flows searching for high yields,’’ he said.