… As Namibia fails to exit technical recession
By Hilary Mare
SIMONIS and Storm Securities (SSS) has maintained its 2017 annual Gross Domestic Product (GDP) forecast at 0.5 percent, which it says will increase to 2.5 percent growth in 2018.
This followed an announcement by the Namibia Statistics Agency (NSA) that the national economy has recorded a contraction of 1.7 percent in real GDP in the second quarter, compared to a decline of 0.4 percent registered in the corresponding quarter of 2016.
SSS economist Frans Uusiku highlighted that the securities firm’s initial impressions of the 2Q2017 GDP figures point to a firming economic recovery, particularly in the agriculture, mining and manufacturing sectors, notwithstanding that this recovery was still in negative territory.
“Along with that, we also believe that the additional cash injection by government of N$3 billion into the economy, to honour outstanding invoices, has supported aggregate demand and liquidity in the domestic economy. On the downside, the contraction in the wholesale and retail trade sector points to a continued diminishing businesses confidence, and insufficient foreign and domestic demand, as consumers remain under pressure. This is also supported by the results of our 2Q2017 Manufacturing Survey,” he said.
Uusiku went on to say that the firm views the recession in the construction sector to be protracted for the short to medium-term, due to the expected implementation of budget ceilings, as part of the fiscal consolidation course.
The NSA highlighted in its report last week that the poor economic performance is mainly attributed to the construction (-51.9 percent), wholesale and retail trade (-8.2 percent) and fishing (-9.8 percent) sectors, which recorded reductions in real value added.
“Sectors such as hotels and restaurants, public administration and defence, and utility (electricity and water) also posted declines of 3 percent, 2.3 percent and 1.1 percent, respectively. Health and financial intermediation decelerated to 0.3 percent and 0.9 percent, in real value added. However, sectors such as agriculture and forestry, and mining and quarrying recorded double digit growth rates of 17 percent and 25.8 percent, compared to 6.9 percent growth and a decline of 19.4 percent recorded in the corresponding quarter of 2016, respectively. The manufacturing sector also registered a growth of 2.9 percent, compared to a contraction of 4.3 percent, in real value added, registered in the same quarter of 2016,” Statistician-General, Alex Shimuafeni, said.
Based on the revised changes, real GDP growth for the first quarter of 2017 contracted by 1.7 percent, from -2.7 percent. The highest revisions were observed in the manufacturing (8.1 percentage points), fishing (-3.4 percentage points) and hotels and restaurants (2 percentage points) sectors.
The annual average inflation rate decelerated to 6.3 percent in the second quarter of 2017 compared to 6.7 percent registered in the same quarter of 2016, representing a decline of 0.3 percentage points. The deceleration is owed to the inflation rates for food and non-alcoholic beverages and alcoholic beverages and tobacco, which registered 4.7 percent and 3.4 percent in the second quarter of 2017, compared to 11.5 percent and 7.2 percent recorded in the same quarter of 2016, respectively
Confidente. Lifting the Lid. Copyright © 2015