Domestic economy expected to fall into deeper contraction
28 Aug 2019 17:00pm
WINDHOEK, 28 AUG (NAMPA) The domestic economy is expected to fall deeper into a contraction by 1,7 per cent during 2019 before recovering to positive growth in 2020, the Bank of Namibia (BoN) said.
The expected deeper contraction during 2019 will be in line with the devastating drought being experienced currently as well as anticipated contractions in major sectors such as diamond mining as well as wholesale and retail trade.
An anticipated reduced contraction in the construction sector represents a reduced drag on overall growth when compared to the last two years, but its impact on overall growth will be offset by weaknesses in other sectors during 2019, the central bank said in its economic outlook for July 2019 availed to Nampa on Wednesday.
Low uranium prices also continued to adversely impact the prospects for uranium production in the country, while the erratic rainfall continued to negatively affect the performance of the agriculture sector beyond 2019.
An expected contraction in agriculture was attributed to poor rainfall during the 2019 rainy season.
The bank added that China-United States trade tensions may negatively affect the demand for Namibian minerals and products, because most mineral exports from Namibia are to the two countries.
Meanwhile, the current account deficit as a percentage of gross domestic product is expected to decline to 1,3 per cent in 2019 from 1,8 per cent in 2018.
The expected contraction in the current account deficit during 2019 is mainly attributed to an increase in secondary income and an improvement in trade balance.