Slow economic rebound expected in 2019 – experts
The much-anticipated economic rebound is still expected to materialise in 2019, although at a weaker pace than earlier thought, research by PSG Wealth Management suggests.
The firm forecast economic growth to improve modestly to 1.1% in 2019 from an estimated -0.1% in 2018. The firm noted that in the medium term, the economy will be supported by continued growth in mining activities as well as the expansion of the country’s port handling, railroad capacities, mobile network and power generation capacities.
According to the research, the agricultural sector is expected to remain under pressure during the medium term due to depleted livestock and fish stock, irregular rainfalls and pests while diamond and uranium production growth are expected to moderate in 2019. This is due to De Beers lowering its output guidance for this year, the closure of the Elizabeth Bay and Deberas mines, the closure of the Langer Heinrich mine and industrial action at the Husab uranium mine in the first quarter.
Meanwhile, the firm expects a slowdown in Chinese growth and continued global trade disputes bode ill for exports in general while export growth will moderate in 2019 due to downward revisions to diamond and uranium exports.
PSG added that the service sector is expected to continue to have a tough time adjusting to fiscal consolidation, deteriorating real disposable incomes and tighter credit conditions while tourism is also lagging due to poor regional growth and structural issues.
The Ministry of Finance estimates that the government budget deficit narrowed to 4.1% of GDP in the 2019/20 fiscal year (ending in March) from 4.4% of GDP in 2018/19 fiscal year. However, PSG expects still expect some moderate fiscal slippages.
“Especially in the short run, given the economy’s rocky path to recovery, the tepid pace of fiscal reforms, probable pushback against efforts to reduce the bloated public wage bill, the volatility of SACU revenue flows, and continued financial losses at major state-owned enterprises,” PSG stated.