The monetary game uneventful
As the economy gears towards the end of the calender year, the governing instruments of monetary policy are further reviewed. During the recent media briefing, the monetary policy committee announced that the repo rate will remain unchanged at 5.50%.
According to the Deputy Governor of the bank of Namibia, Mr Ebson Uanguta, the global economic market still remains fragile. The Euro zone has in effect entered a recession with a 3rd quarter contraction as it shrank by a further 0.4%. USA economy grew by 2.5% during the last quarter but this is still volatile as future growth will be hinged on current negotiations of the fiscal cliff. Further slow downs in China’s economic growth to 7.4% from 7.6% in the last quarter ushered a declining output of its trading partners like Japan (only 0.1% growth in the 3rd quarter).
Despite the gloomy global picture the Namibian economy is fairing well. With a calender year-end average of 6.5%, “Inflation will remain between favourable levels, ”. This, according to Uanguta, is any value below 10%. GDP growth shows a slight decrease though from last years’ performance of 4.8% to 4.6%. Forecast for next year stands at 4.3% which is a lagged response to the global economic decline.
The debate on “non productive” uses of credit have left the overall credit extensions unabated. This has mainly been the result of the booming 21.1% credit extensions to businesses which have overshadowed the declining yet elevated 14% credit extension to individuals. Namibian economy is further bolstered by the SACU receipts which have proved favourable for the economy this year with an average of N$ 3.5 revenue per quarter.