08 Mar 2018 08:20am
RUNDU, 08 MAR (NAMPA) The Gross Domestic Product (GDP) growth for 2017 is estimated to be at a mild contraction of 0,4 per cent, the Minister of Finance, Calle Schlettwein has said.
Schlettwein said this when he tabled the N.dollars 65 billion 2018/2019 National Budget in the National Assembly on Wednesday.
The Minister said this was mainly on account of reduced public spending, contractions in investment and consumption demand as large capital projects reached the completion stage or slowed and weak credit extension to the private sector amidst subdued economic activities.
GDP is a monetary measure of the market value of all goods and services produced in a period either quarterly or yearly of time, therefore, normal GDP estimates are commonly used to determine the economic performance of a whole country or region, and make international comparisons.
On the supply side, Schlettwein said growth in secondary and tertiary industries paused in 2017 as a result of contractionary pressures in the construction, wholesale and retail trade and real estate sectors.
He added that for the year 2018, growth is estimated to have returned to positive rates at about 1,2 per cent and 2,1 per cent is projected for the year 2019.
Over the Medium-Term Expenditure Framework (MTEF) , the economic activity rate is projected to average 3,1 per cent, underpinned by robust export growth most especially from mining output, improvements in private and public investment as well as other components of final demand, said Schlettwein.
The Minister of Finance further emphasised that recovery is expected to be led by increased activities in the mining sector on account of better commodity prices.
While commodity prices have improved, the weak rain conditions this year threaten to slow the pace of continued better recovery in this sector since 2017, he said.
He added that the easing of recessionary pressures in the construction industry and key sectors in the tertiary industry services sector comes to bear over the MTEF.
Climate change is certain and comes with associated costs, requiring us to implement environmental fiscal reforms. Accessing the Global Climate Fund is a priority, advised Schlettwein.
However, the minister further added that the growth outlook is generally too weak to support robust expansion of per capita incomes and requires supportive policy interventions to revive the pace and quality of growth going forward.