PSG Namibia has cut its 2018 GDP growth forecast to -0.4 percent from -0.2 percent, Head of Research, Eloise du Plessis, said this week.
Du Plessis noted that positive GDP data continues to elude Namibia as it has now suffered nine consecutive quarters of negative year on year real GDP growth.
“Owing to the dismal first half GDP figures, we cut our real GDP growth forecast for 2018 to -0.4 percent from -0.2 percent.”
She said the current account deficit is expected to narrow somewhat during 2018, thanks to strong growth in diamond and uranium exports.
“However, the improved export performance is expected to be capped by higher fuel import costs and lower Southern African Customs Union (SACU) revenues. We expect the current account deficit to narrow to 3.9 percent of GDP in 2018 from a deficit of 4.9 percent of GDP in 2017.”
Du Plessis said the average inflation rate is expected to decline to 4.5 percent in 2018 from 6.2 percent in 2017, owing to weak domestic demand.
She, however, said upward inflation pressure is building due to higher fuel and administered prices as well as renewed currency weakness.
PSG expects the economy to rebound in 2019 although at a weaker pace than earlier thought, following an improvement in the construction industry aided by an N$10 billion African Development Bank loan which will support government capital expenditure.
Du Plessis said factors that may hinder growth include the depleted livestock and fish stock numbers, and irregular rainfalls.
“The retail and wholesale trade sectors are having a tougher time adjusting to the fiscal consolidation and tighter credit conditions than we had anticipated they would. Meanwhile, a slowdown in Chinese growth and continued global trade disputes have weighed on global trade and financial market stability, which have suppressed the rebound in commodity prices and exports