The Bank of Namibia (BoN) recently revised its growth forecast for the year 2016 and expect growth to close at 4.5% for the year 2016. The announcement was made late last year.
Said the Bank of Namibia, “the domestic economy is projected to slow down in 2015 and in 2016 before improving in 2017. Namibia’s real GDP growth is projected to slow down to 4.5 and 4.3% for 2015 and 2016, respectively, before rising to 5.9% in 2017.”
Added BoN, “strong performance in the mining and quarrying is expected to drive growth in 2015. Contraction in the agricultural sector, slower growth in wholesale and retail trade, as well as construction, is expected to strain economic growth in 2015. Over the medium-term, growth will be supported by increased mining output from new mines, recovery in agriculture and sustained growth in wholesale & retail trade.”
Risks to the domestic outlook identified include low commodity prices that may lead to deterioration in the country’s external position and exert pressure on both the current account balance and the international reserves. Electricity supply constraints that started in South Africa could worsen further and spill over to the Namibian economy and restrain growth.
BoN said, “increasing uncertainties in the South African economy, mainly in the form of low growth and drought conditions, are likely to increase exchange rate volatility further, with consequential effects on inflation. Finally, the negative impact of the decline in oil prices on the Angolan economy is likely to have a dent on Namibia’s growth, mainly through wholesale and retail trade”.