Economic growth outlook worsens – Analysts
The economy remained in the grip of recession in the second quarter of 2018, and the chief culprits of the disappointing GDP outcome were the manufacturing, fishing, wholesale & retail and hotel & restaurant industries, according to a recent report.
PSG Wealth Management’s December 2018 Quarterly Economic Report shows that there has been a notably lower output in the beverages, basic nonferrous metals as the diamond processing sub-industries weighed on manufacturing.
Meanwhile, the weak economic environment, high household debt levels and rising fuel prices continue to constrain the wholesale and retail sales industries. As for the hotel/restaurant industry, apart from weak domestic demand, the local tourism industry is also experiencing a lull.
The report attributes this to a drop in domestic and intra-African tourist numbers, but also reflects a decline in overseas tourism due to slower global growth.
Looking ahead, as Namibia’s growth outlook worsens, PSG lowered its real GDP forecast to -0.4% (from -0.2%) for 2018 and to 2.1% (from 3.5%) for 2019.
“The agricultural sector is expected to remain under pressure during the medium term due to depleted livestock and fish stock numbers. The retail and wholesale trade sectors are having a tougher time adjusting to the fiscal consolidation and tighter credit conditions than we had anticipated,” PSG reported.
Meanwhile, a slowdown in Chinese growth and continued global trade disputes have weighed on global trade and financial market stability, which has suppressed the expected rebound in commodity prices and exports.