Buttered economy kills Namibia’s appetite for cars
Weak government expenditure, massive job losses and an eroded purchasing power have all compounded to ruin Namibians’ appetite for cars.
Indications are that the number of vehicle sales have plummeted as per the statistical data of last year December.
Economists at Capricorn Asset Management have observed a precipitous decline in the new vehicle sales market in Namibia since its peak of 2 176 vehicles sold in March 2015.
The number sold in December 2018 came to 732.
This is the lowest total number since May 2009, a time that the world was in the grip of the great credit crisis.
According to Capricorn, low vehicle sales is another indicator that confirms the malaise that the Namibian economy finds itself in.
“However, the six-month moving average (a type of trend line) has been ticking up since about the middle of last year. It could yet prove to be a harbinger of the proverbial “light at the end of the tunnel”. Generally, commentators and analysts (ourselves included) expects 2019 to be a better year than 2018, but not by much,” said the experts.
In the meantime, the domestic economy remained weak in 2018 with an estimated further slight decline in real GDP, following negative growth of 0.9 percent recorded in 2017.
The weak outcome in 2018 was mainly due to declining economic activity in sectors such as agriculture and wholesale and retail trade.
Other sectors, including mining, transport and communication as well as manufacturing improved during the same period. The domestic economy is projected to record positive growth in 2019.
The Bank of Namibia has noted that on the global front, real GDP growth is estimated to have moderated slightly to 3.7 percent in 2018 from 3.8 percent in 2017, reflecting weaker growth in both the advanced economies and emerging market and developing economies.
Going forward, growth in the global economy is projected to slow further to 3.5 percent in 2019, due to a loss of momentum in both the advanced economies and emerging market and developing economies
The economic growth rate for advanced economies is estimated to have slowed marginally to 2.3 percent in 2018 from 2.4 percent in 2017.
The BoN observes that the slowdown is on account of weaker performances in the Euro Area, United Kingdom (UK) and Japan, whereas growth in the United States (US) accelerated.