Central Bank projects domestic economy to grow despite looming challenges
Despite risks arising from unpredictable rainfall conditions, a slow recovery in international commodity prices, expected slow demand from key trading partners and the impact of the coronavirus, the Bank of Namibia projects the domestic economy to expand by 1.5% in 2020.
These projections made in the Bank’s February 2020 Economic Outlook report shows better prospects in primary industries, wholesale and retail trade as well as construction are set to grow the economy by 1.5% in 2020 and by 1.4% in 2021, representing a recovery from an estimated contraction of 1.9% in 2019.
However, this latest revision is a downward adjustment from the 1.7% contraction projected in the August 2019 Economic Outlook. Furthermore, growth rates for mining sub-sectors such as diamonds and uranium were also adjusted downwards due to lower volumes produced.
The data shows that risks to domestic growth include the adverse climatic conditions and persistently low international prices for uranium and copper, which may cause affected mines to either reduce or cease production.
Furthermore, the outbreak of the coronavirus in China has already adversely affected travel and transportation between Namibia and China and is expected to have an impact on business activities between the two countries, especially through sectors such as transport and tourism.