Domestic economy projected to contract by 7.3% – Central bank
The local economy is expected to record the largest contraction in its recent history, brought about by the devastating impact of the COVID-19 pandemic.
In its December 2020 forecast report, the Bank of Namibia said the domestic economy is projected to contract by 7.3% in 2020 and to recover by 2.6% and 3.2% in 2021 and 2022, respectively.
Director of strategic communications at the central bank, Emma Haiyambo, said the steep contraction in 2020 is driven by sharp declines in hotels and restaurants; mining; transport and storage; manufacturing; wholesale and retail trade and construction.
“The improved growth projected in 2021 is expected in both the primary, secondary and tertiary industries particularly uranium mining, beverages, wholesale and retail trade,” she said.
Haiyambo said risks to domestic growth are currently dominated by uncertainty regarding the
duration of the COVID-19 pandemic, explaining that risks are linked to ongoing travel restrictions and lockdowns in major economies, exacerbated by the second wave of coronavirus infections.
“In the medium term, however, such risks may reduce following news of effective vaccines being found,” Haiyambo added.