Domestic economy improves significantly during Q1 2022 – Central bank
The economic activity improved significantly during the first quarter of 2022 (Q1), the central bank announced recently.
The domestic economy grew by 5.3% during the quarter under review from the contraction of 4.9% during the same period last year.
The improvement was supported by several key sectors in the primary and tertiary industries, the Bank of Namibia said in its quarterly bulletin for June released month-end.
Available indicators show that the improved activity was particularly reflected in the mining sector, where the production of most key minerals such as diamonds, gold, and zinc concentrate increased.
Diamond production rose significantly both year-on-year (y/y) and quarter-on-quarter (q/q) by 32.9% and 15.5%, respectively, to 341,729 carats in Q1 of 2022, while production of zinc concentrate rose year-on-year by 14.9%, despite dropping q/q, the bank said. The yearly and quarterly price increases of zinc were attributed to a rise in demand mainly from China.
“Gold production rose year-on-year, but declined q/q during Q1 of 2022, while international gold prices rose during the quarter under review. Production of gold rose on a yearly basis by 44.9% to 1,504 kg,” the bulletin stated.
Similarly, the agriculture sector was marked by an increase in marketing activity for cattle and small stock.
Moreover, improvements were also observed in the tertiary industry, particularly in sectors such as wholesale and retail trade, communication, tourism, and transport, the bulletin said.
According to the bank, real turnover in the wholesale and retail trade sector increased partly due to base effects following the further relaxation of COVID-19-related lockdown measures, whereas the communication sub-sector continued to benefit from sustained demand for internet data usage.
“The tourism sector regained some ground as reflected in increased tourist arrivals as more travel restrictions were lifted, but activity remained below the pre-pandemic levels of 2019. Likewise, all categories of cargo transport also increased,” the central bank said, highlighting that the total number of passengers arriving from other countries at Namibian airports increased to 49,097 during Q1 of 2022 from 21,643 passengers recorded during the corresponding quarter of 2021.
Meanwhile, on the contrary, the poor performance in the construction sector continued, on account of slower construction works in both the government and private sectors.
“The government’s spending on public construction work programs fell, in real terms, by 40.2% and 27%, y/y and q/q, respectively,” the bank added.
The bulletin highlighted that Namibia’s inflation rate accelerated during Q1, mainly driven by an increase in transport and housing inflation. Annual Inflation rose to 4.5% during Q1 of 2022, from 2.8 percent during the corresponding quarter of 2021.