First quarter GDP stats confirm domestic economy was already worrisome before lockdown
The first quarter GDP figures released by the Namibia Statistics Agency confirm that the local economy was already beset by several wide raging difficulties even before the nationwide lockdown which took effect on 28 March, research analyst at PSG Namibia, Shelly Louw said.
During the first quarter of 2020, GDP contracted by 0.8%, compared to a bigger contraction of 3.3% during the same quarter in last year. In real terms, GDP stood at N$34 971 million compared to N$35 239 million in the first quarter of of last year.
Louw noted that despite a small contraction, there were already signs of struggle in the economy, as seen from the lagged effects of protracted drought on agricultural production and meat processing, the closure of mineral processing factories, weaker global demand for diamonds, the cancellation of some Air Namibia routes which adversely affected travel and transport, the negative impact of weak disposable income on retail sales and the government’s policy to reign in spending to avoid unsustainable debt accumulation.
This quarter statistics ending March 2020, show agriculture and forestry, mining and quarrying, transport and storage, and manufacturing sectors recorded declines in real value added of 13%, 3.3%, 7%, and 8.3%, respectively. Additionally, declines were also reflected in ‘wholesale and retail trade’ and ‘hotels and restaurants’, ‘administrative and support services’ and public administration sectors.
Looking ahead, the economic downswing is set to deteriorate dramatically in the second quarter of 2020, due to a sudden stop in domestic economic activity and international trade and travel caused by the lockdown restrictions.
“We continue to forecast a 7.8% contraction in real GDP for this year compared to the government’s slightly more optimistic expectation of minus 6.6%,” Louw added.