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