2011 GDP revised downwards
The Bank of Namibia is set to revise downwards its GDP growth estimate for 2011 as the year to date performance of economic indicators in the primary sector remain subdued.
After months of speculation, a source at the central bank revealed this week that the bank will definitely revise its GDP growth for 2011 at next week’s presentation of the 2012 economic outlook.
Although the source could not commit to a figure, he however said the revision will be marginal.
GDP growth for 2011 had initially been estimated at 4.1%, but months of underperfomance in the primary industry, particularly in mining and in some of the key indicators in the secondary industry, has led the Bank of Namibia to adjust its GDP growth estimate for the year.
The downward revision will hardly surprise most people after the central bank announced earlier in the year that most real sector indicators of the domestic economic activities signalled a bleak performance year-to-date compared to the corresponding period last year.
The move by the central bank, although expected, is in sharp contrast to what leading economist Daniel Motinga told this paper recently that the country will see a 4.1% GDP growth in 2011 despite fears of a double dip recession stoked by the sovereign debt crisis in the euro zone area.
Motinga was adamant that the 4.1% GDP growth will be achieved despite the downsize risks.
The revision by the Bank of Namibia also comes at a time when governor, Ipumbu Shiimi surprised journalists by revealing that the local economy grew by 6.6% in 2010. The initial forecast for last year was 4.2%.
Noting the slow pace in which the local economy is growing and the rising inflation, the central bank governor said Wednesday the bank had decided to leave the repo rate unchanged at 6.00% in order to support the weak recovery of the domestic economy.
“Following a comprehensive assessment of the most recent global and domestic economic developments, the Monetary policy committee is of the view that global economic growth has slowed down noticeably.
“The domestic economy continues to grow at a slow pace , particularly in the primary sector. MPC also noted the recent rise in inflation, which was brought about by the rise in specific consumer goods and services.
“Against this background, the MPC decided to maintain the repo rate at its current level of 6.00% with a view to continue supporting the weak recovery of the domestic economy,”governor Shiimi said.