BoN forecasts 4.7% GDP growth
The Bank of Namibia says the domestic economy is expected to grow by 4.7% this year compared to the 5% growth achieved in 2012 citing declining international commodity prices and adverse weather conditions as the reasons for the slow down in growth.
Deputy Governor Ebson Uanguta said the fragile global economy and the falling commodity prices coupled with the worst drought in 14 years, will slow down growth in the local economy. He said this Wednesday when the bank announced that the repo rate will remain unchanged at 5.5%.
Uanguta added that while depreciation of the Namibia dollar against major currencies may not have an immediate impact on volumes of mineral exports and imports, it may pose inflationary pressures going forward, warranting close monitoring.
The primary industries are estimated to slow by 2.5% in 2013, before recovering to 5.7% in 2014. The subdued growth in the primary industries is due to more pronounced effects of drought conditions on the agriculture sectors and the slowdown in mining activities.
The secondary industries will continue to expand with construction activities expected to pick up significantly in 2013 and 2014 supported mainly by increased private sector investment.
However, growth of the hotels and restaurant sector is expected to remain lackluster owing to the weak global environment. The sector is estimated to contract by 0.5% in 2013 before growing by 1.0% in 2014 in line with improved global economic conditions.
The bank’s estimates differ from that of the Ministry of Finance. In her budget presentation in February, the Minister of Finance Saara Kuungogelwa-Amadhila said GDP is projected to grow by an estimated 4.3% in 2013.
FNB Namibia senior manager research and development Daniel Motinga recently torched a storm when he revised the annual GDP growth outlook downwards from 4.5% to 3. 9% in the recent Africa monthly report by RMB on Global Markets research.