Trade deficit to narrow somewhat during Q4 – PSG Namibia
According to the Namibia Statistics Agency (NSA), the country recorded a wider trade deficit in the third quarter of this year compared to the corresponding quarter of last year.
Namibia recorded a trade deficit of N$8.23 billion in Q3 2017 versus a slightly narrower deficit of N$8.19 billion in Q3 2016, mainly attributed to a larger decline in export receipts (N$389 million) compared to the decline in the import bill (N$341 million) over this period.
Namibia’s major export destinations in Q3 2017 were South Africa, Botswana and Switzerland. South Africa accounted for more than a fifth of exports in Q3. The statistics agency noted that overall exports declined by 2.5% y-o-y in Q3, mainly attributed to weaker iron and steel exports to Zambia.
Nevertheless, livestock exports to South Africa and diamond exports to Botswana increased strongly over this period. Zinc exports to China and fish exports to Spain also improved. Precious stones, copper (ores and cathodes) and fish remained the top export products.
In an analysis of the trade deficit, local research firm, PSG Namibia said despite widening significantly on a quarterly basis in Q3, the merchandise trade deficit was still much smaller compared to Q4 2016 (-N$13.91 billion).
“We still forecast Namibia’s trade deficit to narrow somewhat during Q4 and over the course of 2018 as the global demand for local mining and manufacturing goods improve, and weak domestic demand keeps a lid on import growth,” PSG analysts added.
However, PSG said that weak prices for diamonds and uranium are constraining export receipts, which is expected to persist in the short term.
“The ever-present danger of currency weakness due to South African politics and the possibility of higher crude oil prices due to tightening inventories are significant risks that could cause a higher-than-expected import bill,” PSG added.