Credit demands from individuals a concern: BoN

12 Dec 2013 15:50pm
WINDHOEK, 12 DEC (NAMPA) – The Bank of Namibia is concerned about the increased credit demands from individuals.
Bank of Namibia (BoN) Governor Ipumbu Shiimi said this when he announced the Central Bank’s monetary policy stance during a media conference here on Thursday.
“Credit extended to individuals recorded annual growth of 14.9 per cent at the end of October 2013, while growth in credit extension to the corporate sector increased to 11.9 per cent. The growth rate of credit expansion to individuals has remained high, (and) thus warrants targeted intervention,” he stated.
Shiimi also expressed alarm about the annual growth in the private sector credit extension (PSCE), which rose to 13.7 per cent at the end of October 2013, compared to 13.3 per cent during the preceding month due to increased demands for credit.
On the overall growth for 2013, the governor said it is projected at around four per cent down from the previous projection of 4.7 per cent in August the same year.
The downward revision was mainly on account of weaker primary sector activities, particularly agriculture, due to the current drought conditions in the country.
On the other hand, the BoN indicated that the construction sector is estimated to have performed well in 2013 due to brisk economic activity in public works and large ongoing mining investments.
In addition, wholesale and retail trade experienced increased sales on account of tax relief, and the civil service salary regrading.
Shiimi noted that Namibia’s headline inflation slowed to 4.9 per cent in October 2013 due to low inflation rates for food and non-alcoholic beverages and alcoholic beverages and tobacco, while transport and housing inflation increased slightly.
International reserves declined at the end of the third quarter of the year, compared to the previous quarter, reaching N.dollars 13.2 billion as at the end of November 2013.
The decline in reserve coverage is transitory, and reserve levels remain adequate to maintain the fixed currency arrangement and meet other international obligations.
Meanwhile, the Namibia Statistics’ Agency (NSA) rebased the Namibia Consumer Price Index, resulting in a lower contribution of food and non-alcoholic beverages to the overall basket, while that of alcoholic beverages and tobacco, housing, water and electricity increased.