Prepare for positive but poor economic growth- BoN
The Bank of Namibia has predicted that 2019 will bring a positive growth than what has been experienced before in the last three years although it will be poor.
Politicians have been quick to blame the current melt-down on the global forces and this time around the bank reinforced the fear that global economic activity will slow down in 2019.
The poor growth in the local economy has been mirrored by a decline in private sector credit extension otherwise known as PSCE.
On the positive, international reserve stocks remained enough to support the peg between the Rand and the Namibian dollar.
“Annual average growth in PSCE slowed marginally to 6.1% during 2018, from 6.6% in 2017. The moderate growth in PSCE was due to reduced demand for credit by both the household and corporate sectors, especially mortgage, overdraft and instalment credit.”
“Since the previous MPC meeting, the annual growth in PSCE slowed to 6.7% at the end of December 2018 from 7% for October 2018, as reported in the December MPC meeting,” said central bank governor Ebson Uanguta.
By the end of January this year, the stock of international reserves stood at N$30.7 billion, from N$31.1 billion reported in the previous MPC statement, he said.
This will come in time to cover 4.2 months of imports of goods and services.
Meanwhile the repo rate has been kept unchanged at 6.75% to maintain the Rand/Nad link as well as to continue supporting growth.
While the average inflation for 2018 stood at a low 4.3% compared to 6.2% in 2017, going forward overall inflation is projected to average around 5.6%.