WINDHOEK – Bank of Namibia (BoN) Strategic Communication and Financial Sector Development Director Dr Emma Haiyambo said yesterday that country’s real GDP growth is projected to recover slightly to 0.3 percent in 2019, before improving to 1.9 percent in 2020.
She said the expected recovery during 2019 will be supported mainly by anticipated improvements in the construction and hotel and restaurant sector.
“A smaller contraction for wholesale and retail represents a reduced drag on overall growth when compared to the last two years,” she said in a media statement. According to her, the latest overall growth projection of 0.3 percent for 2019 represents a downward revision from 1.5 percent published during December 2018.
“The low uranium price increases uncertainty about expected production from uranium mines, while erratic rainfall may continue to negatively affect the performance of the agriculture sector beyond 2019,” she said, adding that China/US trade tension may negatively affect the demand for Namibia minerals.
Furthermore, Haiyambo said based on the International Monetary Fund’s World Economic Outlook update for April 2019, global growth is projected at 3.3 percent in 2019 and 3.6 percent in 2020. “The 3.3 percent projected for 2019 represents a 0.3 percentage point decline from the 3.6 percent growth estimate for 2018,” she said in a statement.
She said the slowdown in global output growth is largely attributed to waning cyclical forces in advanced economies as output gaps have been largely closed, US fiscal stimulus which is expected to diminish and the impact of the higher import duties between the United States and China.
Furthermore, Haiyambo said a decline in business confidence and higher policy uncertainty across many countries will hinder growth.
“Risk to the global growth outlook remains and include the possible collapse of the China/US trade negotiations, escalation of trade tensions to other countries and a no-deal withdrawal of the UK from the European union,” she explained.
She said over the medium term, the key risks include climate change and political discord in the context of rising inequality.