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GDP declines by 6.5% in first half of 2021

GDP declines by 6.5% in first half of 2021

The country’s real GDP contracted sharply in the first quarter of this year, declining by 6.5%, compared with a smaller contraction of 5.9% during the fourth quarter of 2020, according to the Namibia Statistics Agency’s latest quarterly report.

Looking at the economy from the production side in the first quarter, the worst-performing industry was construction (-23%), mainly due to a substantial decline in government expenditure on construction.

Manufacturing (-22.3%) was second worst, due to massive decrease in the basic materials, beverages, and other foods subindustries. Grain mill products, fish processing, and meat processing also recorded notable declines. Mining & quarrying (-19%) came in third worst as a result of poor outcomes in the diamond, metal ores, and other mining & quarrying subindustries. Agriculture & forestry’s (-5.4%) star performance in the fourth quarter of 2020 (+8%) was short-lived, as live cattle exports to South Africa slumped during Q1 2021.

In the services sector, several industries also recorded declines, namely financial services (-13.8%),wholesale & retail (-8.2%), transport & storage (-8.2%) and hotels & restaurants (-12%).

The few bright spots in the economy were ICT (+17.6%), health (+12.8%), electricity & water (+7.7%) and real estate activities (+4.6%).

PSG Namibia in their quarterly outlook report said the past few years have been the most challenging for the economy since independence.

“A lack of investment since the end of a boom period in mining, real estate, and public infrastructure has curtailed the construction industry, while the prices of the main export minerals – diamonds and uranium – have been depressed. Moreover, Namibia suffered successive droughts from 2013 to 2019,” PSG noted.

PSG further noted that in the medium term, a modest economic recovery will be supported by new mining activities as well as the expansion of the port handling, railroad, mobile network, and power
generation capacities.


About The Author

Donald Matthys

Donald Matthys has been part of the media fraternity since 2015. He has been working at the Namibia Economist for the past three years mainly covering business, tourism and agriculture. Donald occasionally refers to himself as a theatre maker and has staged two theatre plays so far. Follow him on twitter at @zuleitmatthys