Economic slowdown projected for 2015/16

23 Dec 2015 17:40pm
WINDHOEK, 23 DEC (NAMPA) - Namibia’s real GDP growth is projected to slow down to 4.5 and 4.3 per cent for 2015 and 2016, respectively, before rising to 5.9 per cent in 2017.
This is according to the latest economic outlook issued by the Bank of Namibia (BoN) this week.
The statement said the International Monetary Fund (IMF) has projected a slowdown in the Namibian economic growth during 2015 and 2016 before it improves in 2017.
The contraction of the agricultural sector and slow growth in wholesale trade are key factors that will hinder economic growth during the said period.
“Contraction in the agricultural sector, slower growth in wholesale and retail trade, as well as construction, is expected to strain economic growth in 2015,” it said.
It however added that there were economic sectors which will help in sustaining economic growth during the expected economic slowdown period.
“Over the medium term, growth will be supported by increased mining output from new mines, quarrying and recovery in agriculture and sustained growth in wholesale and retail trade,” the statement said.
It further stated that risks to the domestic outlook include low commodity prices that may lead to deterioration in the country’s external position and exert pressure on both the current account balance and the international reserves.
“Electricity supply constraints that started in South Africa could worsen further and spill over to the Namibian economy and restrain growth. Increasing uncertainties in the South African economy, mainly in the form of low growth and drought conditions, are likely to increase exchange rate volatility further, with consequential effects on inflation.
“Finally, the negative impact of the decline in oil prices on the Angolan economy is likely to have a dent on Namibia’s growth, mainly through wholesale and retail trade,” it added.
Meanwhile, the global economy is expected to slow down during 2015, before improving in 2016. According to the IMF's World Economic Outlook for October 2015, the global economy is expected to grow at 3.1 per cent and 3.6 during 2015 and 2016, respectively, from 3.4 per cent in 2014. Also, the Sub-Saharan African region economy is expected to moderate to 3.8 per cent in 2015 before picking up to 4.3 per cent in 2016. The slowdown is attributed to falling commodity prices, weakening exports to China and other key emerging market economies.