GDP expected to massively contract by 6.9% in 2020 – central bank
Namibia’s economic prospects have weakened substantially since the last update in February, due to the negative impact of COVID-19, with real Gross Domestic Product (GDP) expected to contract by 6.9% this year.
This is according to the Bank of Namibia’s latest economic outlook report released on 25 April.
According to the outlook, the deep contraction estimated for 2020 is attributed to the outbreak of COVID-19, which led to travel restrictions across the world and lockdowns in many countries.
The sectors expected to be most affected by travel restrictions include hotels and restaurants, mining and quarrying, beverages amongst others. This forecast assumes that travel restrictions will remain in place until the end of July.
The 6.9% contraction estimated for 2020 is a severe deterioration from a 1.5% growth that was projected in the February 2020 update. While this contraction is expected, it is also expected that GDP will recover to a growth of 1.8% in 2021, the central bank said.
Furthermore, the International Monetary Fund’s World Economic Outlook for April 2020, projects that the global economy will contract substantially in 2020, with the contraction projected for both advanced and emerging market and developing economies.