Global growth slowdown to weigh on Namibia
Strong growth expected in 2022
The slowdown in 2023 will take some shine off the recent impressive performances of Namibia's diamond mining and manufacturing industry and also slow down the recovery in tourism.
Global growth slowdown to weigh on Namibia
Strong growth expected in 2022
The slowdown in 2023 will take some shine off the recent impressive performances of Namibia's diamond mining and manufacturing industry and also slow down the recovery in tourism.
We forecast real GDP growth to moderate to 2.6% in 2023 from 3.9% in 2022. PSG
Phillepus Uusiku
While the domestic economy is expected to record its best growth rate since 2015 in 2022, global growth slowdown will weigh on Namibia’s performance this year, analysts say. The International Monetary Fund (IMF) estimates the global economy to decelerate to 2.7% in 2023.
According to PSG Economic Outlook, the global growth slowdown in 2023 will take some shine off the recent impressive performances of Namibia's diamond mining and manufacturing industry and also slow down the recovery in tourism.
The robust rebound in private consumption following the 2020 lockdowns will also fade fast this year as the positive impact of reopening the economy tapers off, export earnings moderate, fiscal stimulus is curbed, and interest rates remain elevated, PSG added.
The latest quarterly gross domestic product (GDP) growth figures by the Namibia Statistic Agency (NSA) indicate that the domestic economy expanded by 6.6%, 6% and 4.3% during the first, second and third quarter of 2022, respectively.
PSG projects Namibia’s real GDP to grow by 3.9% in 2022, before moderating to 2.6% in 2023.
Meanwhile, Bank of Namibia projects the economy to grow by 2.7% in 2022 and expand further by 3.9% in 2023.
In addition, the World Bank projects the domestic economy to growth by 2.8% in 2022, before moderating to 2.0% this year.
INFLATION
The Bank of Namibia raised the repo rate by 300 basis points (bps) in 2022 to combat rising inflation and to maintain the one-to-one currency peg to the South African rand.
“We expect the central bank will raise its policy rate by a further 50 bps to 7.25% in the first quarter of 2023, in line with the policy of the South African Reserve Bank which it closely follows,” PSG said. The first monetary policy announcement for the year is expected to take place on 15 February.
Domestic inflation averaged 6.1% in 2022 which was mainly driven by transport and food. PSG anticipates inflation to average 5.0% this year. “We expect transport price inflation to remain in double digits in first quarter of 2023 due to base effects, but to ease significantly over the remainder of the year thanks to the lower global oil price,” PSG added.
The ministry and energy recently announced a reduction in fuel prices.
Fin24 yesterday reported that huge sanctions are looming for Russia’s diesel exports. From February 5, the European Union, the G-7 and its allies will attempt to impose a cap on the price of Russia’s fuel exports — the latest punishment for its invasion of Ukraine. That will coincide with an EU prohibition on almost all imports of Russian oil products.
Similar measures are already in place on the country’s crude shipments, but it is the cap and ban on refined fuels — and in particular diesel — that has some oil-market watchers concerned about the potential for price [email protected]
Strong growth expected in 2022
The slowdown in 2023 will take some shine off the recent impressive performances of Namibia's diamond mining and manufacturing industry and also slow down the recovery in tourism.
We forecast real GDP growth to moderate to 2.6% in 2023 from 3.9% in 2022. PSG
Phillepus Uusiku
While the domestic economy is expected to record its best growth rate since 2015 in 2022, global growth slowdown will weigh on Namibia’s performance this year, analysts say. The International Monetary Fund (IMF) estimates the global economy to decelerate to 2.7% in 2023.
According to PSG Economic Outlook, the global growth slowdown in 2023 will take some shine off the recent impressive performances of Namibia's diamond mining and manufacturing industry and also slow down the recovery in tourism.
The robust rebound in private consumption following the 2020 lockdowns will also fade fast this year as the positive impact of reopening the economy tapers off, export earnings moderate, fiscal stimulus is curbed, and interest rates remain elevated, PSG added.
The latest quarterly gross domestic product (GDP) growth figures by the Namibia Statistic Agency (NSA) indicate that the domestic economy expanded by 6.6%, 6% and 4.3% during the first, second and third quarter of 2022, respectively.
PSG projects Namibia’s real GDP to grow by 3.9% in 2022, before moderating to 2.6% in 2023.
Meanwhile, Bank of Namibia projects the economy to grow by 2.7% in 2022 and expand further by 3.9% in 2023.
In addition, the World Bank projects the domestic economy to growth by 2.8% in 2022, before moderating to 2.0% this year.
INFLATION
The Bank of Namibia raised the repo rate by 300 basis points (bps) in 2022 to combat rising inflation and to maintain the one-to-one currency peg to the South African rand.
“We expect the central bank will raise its policy rate by a further 50 bps to 7.25% in the first quarter of 2023, in line with the policy of the South African Reserve Bank which it closely follows,” PSG said. The first monetary policy announcement for the year is expected to take place on 15 February.
Domestic inflation averaged 6.1% in 2022 which was mainly driven by transport and food. PSG anticipates inflation to average 5.0% this year. “We expect transport price inflation to remain in double digits in first quarter of 2023 due to base effects, but to ease significantly over the remainder of the year thanks to the lower global oil price,” PSG added.
The ministry and energy recently announced a reduction in fuel prices.
Fin24 yesterday reported that huge sanctions are looming for Russia’s diesel exports. From February 5, the European Union, the G-7 and its allies will attempt to impose a cap on the price of Russia’s fuel exports — the latest punishment for its invasion of Ukraine. That will coincide with an EU prohibition on almost all imports of Russian oil products.
Similar measures are already in place on the country’s crude shipments, but it is the cap and ban on refined fuels — and in particular diesel — that has some oil-market watchers concerned about the potential for price [email protected]
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