WINDHOEK – The domestic economy’s performance remained suppressed in the first quarter of 2019, recording a contraction of two percent compared to the decline of 0.5 percent recorded in the corresponding period of 2018. In addition, the Namibia Statistics Agency (NSA) yesterday revealed that year-on-year, real gross domestic product (GDP) for the first quarter of 2019 stood at N$27.026 billion compared to N$27.589 billion, showing the sum of real value added for sectors shrunk by N$563 million.
According to the NSA, the deterioration in the economy is observed across major sectors with more than half of the sectors posting declines in real value added.
Divulging the latest figures yesterday, NSA statistician general and chief executive officer, Alex Shimuafeni, noted that the key drivers for the contraction are construction, wholesale and retail trade, agriculture and forestry, as well as hotels and restaurants that recorded declines of 27.8 percent, 6.7 percent, 6.7 percent and percent, respectively.
“The reduction in the agriculture and forestry sector emanated from declines recorded in both the livestock and crop farming subsectors. Although a recovery, the livestock subsector posted a decline of 0.3 percent growth in real value compared to a steeper decline of 8.3 percent recorded in the corresponding quarter of 2018,” said Shimuafeni.
He added that moderate declines were also observed in the sectors of public administration and defence (1.2 percent); transport and communication (0.5 percent); and the mining and quarrying sector (1.1 percent).
During the period under review, macroeconomic aggregates such as inflation showed an upward tick, posting a 4.5 percent relative to the 3.5 percent recorded in the preceding quarter of 2018. This is an increase of a one percentage point, however declining by 0.7 percentage point on a quarter by quarter basis.
According to Shimuafeni, the rise in inflation is due to an increase in the category of food and alcoholic beverages as well as transport.
However, the NSA observed improved performance in the education and health sectors, which posted growths in real value added of 1.3 percent and 2.4 percent respectively in the first quarter of 2019 compared to declines of 5.0 percent and 5.8 percent of the corresponding quarter for 2018. This is attributable to the easing of fiscal consolidation by central government.
For the first time since quarter two of 2011, the economy recorded a positive trade surplus due to imports that declined at a faster pace compared to exports. On average, imports of goods for final and intermediate consumption decelerated faster, whilst the imports of capital goods decelerated modestly. The methodology for compiling trade statistics for national accounts takes into account change of ownership between residence and non-residence, whereas international merchandise trade records goods crossing the border. “Despite an accommodative monetary policy which kept the repo at 6.75 basis point during the period under review, the economy remains suppressed in the first quarter of 2019. Trade surplus is an indication of weak consumer demanding fewer goods from abroad,” Shimuafeni explained.
Meanwhile, the Q4 of 2018 GDP has been revised downwards by 0.2 percentage point from -1.7 percent released in March 2019 to -1.9 percent. Shimuafeni pointed out that revisions are part of good quarterly national accounts compilation best practices because they provide users with more accurate data. The latest revision is mainly due to updated data received from data sources. The highest growth rate revisions were recorded in the fishing, mining, agriculture and utility sectors.