Current account deficit narrows significantly during second quarter
The current account deficit declined to N$614 million during the second quarter of this year, compared to N$2.4 billion during the same period last year, according to the Bank of Namibia’s (central bank) recently released Quarterly Bulletin report.
This was mainly attributable to an improved merchandise trade deficit which was supported by increased exports and lower imports. The merchandise trade deficit narrowed to N$2.8 billion during Q2 2018 compared to N$5.9 billion during the same period of last year.
Furthermore, the central bank noted that Namibia continues to source most of its imports from South Africa (70%), followed by China (7%), the eurozone (6%) and Botswana (5%). Namibia imports most of its vehicles, consumer goods and mineral fuels from South Africa. Namibia’s leading export partners are the eurozone (29%), followed by South Africa (24%), Botswana (14%) and China (9%). Exports to the eurozone consisted mostly of processed fish and uranium.
Looking at non-goods trade, Namibia’s services account recorded a higher surplus of N$94 million during Q2 2018, compared to a surplus of N$87 million recorded during the same period of last year.
The central bank attributed the increase to higher earnings from travel services, reflecting strong performance in foreign tourism. Meanwhile, the Namibia recorded net primary income outflows of N$2.4 billion mainly due to increased payments to foreign direct investors. On the other hand, secondary income inflows (current transfers) decreased significantly due to SACU receipts dropping by 11.3% y-o-y to N$4.3 billion.