Second quarter stats paint a dismal economic picture
Research Analyst at PSG Namibia, Shelly Louw writes in her most recent market overview that a sharp contraction shows up in most official and industry data sets.
“The Namibia Statistics Agency’s sectoral reports for June 2020 are broadly indicative of a sharp contraction in economic activity in Q2 2020 during the worst of the local and international lockdowns,” she stated. The one exception, though, is the Building Plans Completed index which recorded a massive 191 percentage point increase mostly due to the increase in the Windhoek sub-index. This comes off a very low base and rests on the completion of only three new residential complexes and a shopping mall.
Similarly, growth in Private Sector Credit Extension has slowed to 2.8% in June. In the first month of the third quarter, July, it has slowed even further to 2.3% which is also the weakest level on record.
The Electricity Sales Composite index also declined by 4.9% in the second quarter whereas it still showed growth of 1.5% in the first quarter. Despite the slowdown in electricity consumption, locally generated electricity increased strongly as a result of the high flow of the Kunene River boosting generation at Ruacana.
Bucking the negative quarterly trends is the Mining Composite index. For the quarter the mining index improved by 3.2% but also coming from a low base. In the first quarter, it contracted by -4.5%.