Business Climate Monitor drops by 0,13
WINDHOEK, Aug 22 – The IJG Business Climate Monitor (BCM) dropped by 0,13 points in June, standing at a 45,30 points level; the lowest level since December 2003.
The 0,13 drop is identical to the drop seen in May 2017 and signals the sixth consecutive month that the index is below the 50-point level that indicates economic contraction.
The leading indicator has recovered slightly, reaching the same level recorded in March this year, but remains well below the 50-point level for the ninth consecutive month.
An Institute for Public Policy Research (IPPR) report noted that the slight drop in the BCM, coupled with the recovery in the leading indicator, suggests that the economic downturn is moderating.
“Of the 31 indicators measured by the index, 15 expanded in June, one remained unchanged and the remaining 15 contracted. The preliminary trade statistics are a cause for concern. While the value of imports fell slightly, the value of exports fell by 40% from May to June, to their lowest level since June 2015,” noted the report.
The report noted that this poses a danger for international reserve levels, and requires continued capital inflows in order to maintain macro-stability and the currency peg over the long term.
“Vehicle sales were up slightly in June, but still below the level seen for the same period last year. On a positive note, agriculture growth is improving after the end of the drought, with the highest number of livestock marketed on record being seen in June,” noted the IPPR report.
Similarly, despite sales volumes, beef and lamb prices are at their highest levels to date. Moreover, diamond production has also increased up by 31% compared to May and the uranium price remains weak, and a strong rand does not bode well for the sector over the coming months. – Sharma Mundingi