03 Nov 2016 17:10pm
WINDHOEK, 03 NOV (NAMPA) Namibias gross domestic product (GDP) is expected to slow down to 2.5 per cent in 2016 and increase to 4.0 per cent in 2017.
This is according to the Bank of Namibia (BoN)s economic outlook update for November issued on Thursday by the banks Director for Strategic Communication and Financial Sector Development, Emma Haiyambo.
The projected growth rates represent a slowdown from the national accounts estimate of 5.3 per cent for 2015.
This contraction is mainly attributed to a projected decline in construction, diamond mining sub-sector, electricity and water sectors and the planned reduction in government expenditure, the statement said.
Good growth prospects are expected from metal ore mining (copper and gold), uranium mining, as well as the wholesale and retail sector. These sectors are expected to sustain growth at 2.5 per cent in 2016.
Over the medium-term, growth will mainly be supported by anticipated recovery in both agriculture and diamond mining, as well as improved growth in uranium mining, manufacturing and transport and communication sectors.
The statement noted that risks to the domestic growth outlook remains centred on both global and regional spill-overs and the prevailing drought.
Weak global demand emanating from slower growth in advanced economies and major emerging market economies, coupled with slow recovery international commodity prices, would slow production at some of the local mines especially uranium mines.
The statement further noted that the drought in Namibia posed an immediate threat to production in primary industries and to food inflation.
The water shortages may restrain growth in sectors such as construction, beverages, meat processing and agriculture.
According to the economic outlook, global growth remains weak for the remainder of 2016, with upside growth in 2017.
According to the International Monetary Fund (IMF)s World Economic Outlook for October 2016, the global economy is expected to grow by 3.1 per cent and 3.4 per cent during 2016 and 2017 respectively.