Current account deficit over the coming quarters expected to narrow -researcher
The weak domestic import demand and increasing uranium exports are expected to narrow the country’s current account deficit over the coming quarters, Fitch Solutions Macro Research said in a report.
The deficit is expected to continue to narrow over the short term, from an estimated 5.4% of GDP in 2018 to 3.5% in 2019 and 3.3% in 2020, the research firm said in the October Africa Monitor report.
“We forecast real GDP growth will slide further into negative territory in 2019, before picking up modestly to 0.3% in 2020,” the report added.
According to the research firm, dim growth prospects for most sectors of the economy will dampen household incomes and spending power, weakening demand for consumer goods imports.
“Moreover, while capital spending is projected to increase by 42.2% in FY2019/20 budget statement, we believe that a much lower portion of the proposed N$7.9 billion will be spent productively given increasingly lower development budget execution rates,” the report added.
Meanwhile, the report said increasing uranium production is set to offer tailwinds to Namibian exports.
“A ramp-up in uranium production will see exports of the radioactive metal tick up,” the research firm added.
Despite previous project delays, the firm expects the key Husab uranium mine to approach capacity in 2020 and forecasts robust uranium output growth of 40% in 2019 and 10% in 2020.