Low commodity price risk to economy: BoN

07 Mar 2017 18:10pm
WINDHOEK, 07 MAR (NAMPA) - Low commodity prices and a global uncertainty emanating from trade relations between the United States of America and trading partners remains a risk to Namibia’s economy.
The Economic Outlook Update issued by the Bank of Namibia (BoN) on Tuesday said despite recent uptick in the price of uranium, the potential reverse could exert pressure on Namibia’s account balance and international reserves.
“These risks to the domestic economy remains definite since the last economic outlook update in November 2016,” it said adding Namibia’s agriculture is also on the line.
The recent outbreak of armyworms in some parts of the country and in the Southern African region is a major risk to growth in the agricultural sector.
The worms are since January attacking the maize plantation at the Etunda Green Scheme Irrigation Project in the Omusati Region.
The project experienced an outbreak of American Bollworms since November last year, and the commando worms attack emerged just as the bollworms problem decreased.
The Update indicated Namibia’s real gross domestic product (GDP) growth is estimated at 1.0 per cent in 2016 and projected to increase to 2.9 per cent and 3.8 per cent in 2017 and 2018 respectively.
The growth estimate for 2016 represents a downward revision of 1.5 per cent from the estimate of 2.5 per cent in November 2016.
This was mainly attributed to a deeper than expected contraction in sectors such as diamond mining and construction.
The economic outlook said there were however some improvements in the uranium-mining sub-sector and a lesser contraction in the agriculture sector but these developments were not strong enough to mitigate a slowdown in the overall growth estimate for 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 and transport and communication sectors.