WINDHOEK, Sept. 27 – The Namibian local economy remains in a ‘technical recession after two sequential quarters of adverse economic growth, as confirmed by Namibia Statistics Agency’s (NSA) statistician general Alex Shimuafeni.
Shimuafeni reiterated that because the economy has been in a negative for two consecutive quarters, it is a recession.
This comes after figures from the NSA showed that the economy contracted by 1,7% in the second quarter of 2017, compared to a decline of 0,4% seen in the same period of 2016.
Shimuafeni attributed the ‘poor performance’ mainly to construction, wholesale, and the fishing sector that recorded a contraction in real value added of 51,9%, 8,2%, and 9,8% respectively.
Simonis Storm Securities economist Frans Uusiku said GDP figures point to a firming economic recovery particularly in the Agriculture, Mining and Manufacturing sectors, albeit still in the negative territory, saying they expected the economy to contract by 1.0% in 2Q2017.
“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,” Uusiku said.
He noted that they retained their annual GDP forecast of 0,5% for 2017 and 2,5% for 2018.
Klaus Schade, Economic Association of Namibia (EAN) executive director said the quarterly GDP data shows a number of encouraging developments.
He added that after three years of drought over the past four years, the agricultural sector is recovering and is showing strong growth albeit starting from a low basis.
“We expect the agricultural sector to maintain this performance throughout 2017. The stronger performance of the mining sector is also encouraging, in particular the increase in diamond, zinc and uranium production, which will have a positive impact on exports. Furthermore, increased mining output will benefit the transport sector (including cargo handled at the ports) that performed better in the second than in the first quarter,” Schade said.
He noted that despite the continuing decline of the construction sector, which has an impact on construction-related manufacturing activities such as metal fabrication and so forth, the manufacturing sector recorded a positive growth rate.
“We expect this trend to continue, since beverage production is expected to continue to expand since water supply has improved,” he said. – Sharma Mundingi