Finance Minister, Calle Schlettwein, has cut the country’s initial 2017 economic growth forecast of 2.5 percent down to 1.8 -2.3 percent after Namibia slipped into a technical recession in the second quarter.
The downward revision comes as the Namibia Statistics Agency (NSA) said last week that the economy contracted by 1.7 percent in the second quarter, the same shrinkage as in the first quarter.
Schlettwein told a news conference in the capital on Wednesday that the projected 2017 growth would be led by a recovery in agriculture after a drought last year and an expansion in the mining sector.
“The recovery in mining and agriculture would support potential growth in primary industries, with corresponding improvements in beneficiation and manufacturing activity, given the strong sectoral linkages,” Schlettwein said.
Growth in mining is mainly a result of increased production of uranium, following the commissioning of the Husab Mine, which is expected to become the second biggest uranium mine in the world once it reaches its nameplate capacity.
The finance minister added that a decision by the Bank of Namibia to cut interest rates by 25 basis points to 6.75 percent in August would also support domestic demand conditions in the medium-term. Namibia’s economy grew by 1.1 percent in 2016, slumping from a more than 5 percent expansion a year earlier due to deep contractions in construction, uranium and diamond industries.