By Desie Heita
Windhoek
Although consumers are weighed down by economic strains of high food and ever-increasing fuel prices, of which a seventh increase in under a year came into effect today, a recent survey says the key economic indicators show good economic performance for the future.
The Bank of Namibia (BoN) quarterly bulletin for the first quarter of 2008 shows good performance in several sub-sectors, albeit with a slowdown in some supply and demand factors. Prospects for the remainder of the year look good and the economy may expand by about 4 percent this year.
The overall balance of payment is healthy with a surplus in the current account, thanks largely to SACU (Southern Africa Customs Union) receipts and partly to steady growth in foreign direct investment as well as healthy export receipts from the mining sector.
However, food and transport inflation together with other categories such as furniture and household equipment drove the annual inflation to a record high of 9,7 percent as of May, up from an average of 8 percent recorded earlier in the quarter.
Luckily for Namibia, the reserve bank was quick to rein in spending through the tightening of the monetary policy in mid-2006. The bank says this had the desired effect as the country had initially experienced a high growth in credit extension to the private sector by the banking system, which may have contributed to the rise in inflation. Credit extension to the private sector grew at 12,8 percent per annum during March, compared to 22,6 percent in South Africa.
The report also notes that the special offers from commercial banks contributed to the increase in the sales of 1?