By Kaleb Nghishidivali
Windhoek, 16 August 2023- The Bank of Namibia’s Monetary Policy Committee (MPC) has made the decision to uphold the Repo rate at 7.75%. This determination arises from a thorough evaluation of worldwide, regional, and local economic circumstances, with the goal of ensuring the stability of the exchange rate between the Namibia Dollar and the South African Rand, while also offering support to the domestic economy.
In a statement issued by Johannes !Gowaxab, it was highlighted that the Namibian economy demonstrated robust growth, with real GDP reaching its zenith in the first quarter of 2023, sustaining a growth rate of 5.0%. This impressive figure notably exceeded the 2.1% growth recorded during the final quarter of 2022. In July 2023, inflation pressures eased, and the growth in Private Sector Credit Extension (PSCE) remained modest.
While positive momentum is evident, the projection for overall real GDP growth in 2023 anticipates a slowdown to around 3.3%, in contrast to the 4.6% attained in 2022. This foreseen deceleration is attributed to decreased growth within the primary industry. Factors such as global economic fragility, tighter worldwide monetary policies, elevated crude oil prices, and ongoing geopolitical tensions continue to present risks to Namibia’s domestic economic prospects.
The annual growth in PSCE exhibited improvement, reaching 3.0% in June 2023, albeit persisting below historical standards. This advancement is linked to heightened demand for credit within the household sector, particularly in segments like mortgages, installment sales, and leasing credit.
Furthermore, Namibia’s merchandise trade deficit observed an 18.6% reduction to N$15.4 billion during the initial half of 2023, as exports outperformed imports. Export earnings benefited from increased volumes in uranium, diamonds, gold, and fish exports, boosted by the depreciation of the Namibia Dollar against the South African Rand.
The nation’s international reserves remain steady, totaling N$54.2 billion at the close of July 2023. This reserve level is viewed as adequate for sustaining the currency peg between the Namibia Dollar and the South African Rand, as well as fulfilling international financial obligations.
Globally, preliminary data suggests improved economic activity during the second quarter of 2023, credited to robust consumer spending in the United States and the relaxation of Covid-19 restrictions in China. Nonetheless, global economic growth is anticipated to moderate to 3.0% in 2023, a decrease from the 3.5% attained in 2022. – Namibia Daily News
