WINDHOEK, JAN 23– A “flattening” out of the down cycle as opposed to a real recovery is expected to result in a 1.5 percent marginally positive growth in 2019, said a Namibian economist on Wednesday.
In his Economic Outlook Report 2019, Floris Bergh, the Chief Economist at Capricorn Asset Management said a down-cycle had been evident since 2016 and carried over throughout 2017 and 2018 in the south west African nation.
“In fact, we expect that the economy as a whole contracted in 2018 in real terms.” he said.
Bergh said 2018 had been a mixed year for primary sectors, that saw agriculture and fishing struggle, while mining however, for the second year over the past five, had experienced a bounce.
“We look for somewhat positive growth from these three sectors in 2019,” he added.
Among secondary sectors, manufacturing contracted by an estimated 5 percent, whereas electricity, water and construction are expected to have done reasonably well.
With regard to the tertiary sector, where, amongst others, the role of government is taken into account, Bergh said the Fiscus had been under tremendous pressure which, of necessity, stifled growth in Government spending and, hence, economic growth.
“Retail and wholesale trade has contracted by an estimated 4.9 percent in 2018. Some other industries like transport, post and telecoms, financial, real estate and business services were positive, but hotels and restaurants were negative, ” Bergh added.
Turning to inflation, Bergh believed there were possibilities that Namibia could have a somewhat higher rate in 2019, before it decreases again in 2020.
In addition, seasonal patterns in the inflation basket as well as low inflation in early 2018 would probably contribute to a 6 percent plus rate at times during the year, before an expected average of about 5.5 percent in 2020.
“This means that Namibians should not expect wage increases much above 5-6 percent,” he said. – XINHUA
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