19 Feb 2014 13:30pm
WINDHOEK, 19 FEB (NAMPA) - The Governor of the Bank of Namibia (BoN), Ipumbu Shiimi on Wednesday announced that the repo rate will remain unchanged at 5.50 per cent.
Speaking during the BoN's monetary policy announcement in the capital, Shiimi said the decision was taken at the Monetary Policy Committee meeting held on 18 February 2013.
He said the domestic economy is forecasted to grow by 5.3 per cent in 2014, adding that the growth is mainly supported by high growth in the construction sector, mining and strong consumer demand.
He explained that growth in 2013 was mainly driven by construction, mining and the wholesale and retail trade.
The brisk growth of the construction sector activities reflected sizable mining investments and public sector capital programmes, he said.
Shiimi noted that mineral production, mainly diamonds and zinc concentrate, sustained the performance of the mining industry, while the growth of the wholesale and retail trade sectors was supported by increases in disposable income as a result of the reduction in income tax rates for individuals and regrading of civil servant salaries.
The BoN governor further stated that the agricultural sector remained weak due to the drought.
He also said the inflation rate is projected to increase moderately to 6 per cent in 2014.
This is still an acceptable level. The upside risks to inflation are mainly the impact of the depreciation of the national currency on import, he said.
Namibias overall average inflation slowed in 2013, mainly due to a reduction in food and transport inflation.
Shiimi said the annual overall inflation rate decreased from 6.7 per cent in 2012 to 5.6 per cent in 2013.
Meanwhile, the growth in private sector credit extension (PSCE) moderated to 14.3 per cent by the end of December 2013, compared to 17 per cent by end December 2012.
He stressed that the relative slower growth reflected a decline in levels of overdraft credit and no growth in other loans and advances granted to the business sector.
The governor noted that the growth in instalment credit for individuals remains elevated and warrants constant monitoring.