The Bank of Namibia has projected the Namibian economy to grow by at least 5% and 5.5% during 2015 and 2016.
This will be an improvement from a preliminary 4.5% recorded in 2014.
In a press statement issued last week, Director of Strategic Communication and Financial Sector Development Ndangi Katoma said weather conditions are expected to restrain growth in agricultural sector which is only expected to grow positively in 2016.
“Growth will be driven by construction in private and public sectors, increased mining output from new mines and projected increases in manufacturing activities,” Katoma said.
Katoma added that the downside risks to domestic growth include slow recovery in the country’s trading partner economies coupled with adverse local weather conditions.
The projected recovery in uranium mining is partly dependent on the assumption that international prices for uranium will recover.
“This will ensure continuation of uranium production and export and entice mines that are on hold to resume with production. Similarly, recovery in agriculture may be delayed if weather conditions do no improve during 2015/16 season,” Katoma said.
Furthermore, electricity supply constraints that started in South Africa could worsen further and spill over to the Namibian economy and could restrain growth.
Katoma said the negative impact of the decline in oil prices on the Angolan economy is also likely to have a dent on Namibia’s growth, mainly through wholesale and retail trade.
He added that the global economic outlook based on International Monetary Fund (IMF) projections highlighted that the world economy is expected to slowdown in 2015 before strengthening in 2016.
The global economic growth is expected to slow down to 3.3% during 2015 and to improve to 3.8% in 2016.
“The estimated slowdown in world growth during 2015 is driven mainly by the unexpected contraction in the United States during the first quarter of the year attributed to harsh weather conditions,” Katoma said.
Katoma noted that the Gross Domestic Product growth (GDP) in sub-Saharan African region is expected to slow down to 4.4% in 2015 from 5% in 2014, before picking up to 5.1% in 2016.
The projected slower growth in 2015 is attributable to recent declines in commodity prices and the impact of the Ebola epidemic in affected countries.
Katoma said growth in South Africa was revised downwards to 2% and 2.1% for 2015 and 2016 respectively. Meanwhile, the downward revision was supported by worsening electricity supply constraints and tighter fiscal policy.
“Going forward, the downside risks to global growth have eased somehow, with major economies that remained in recession until 2014 and are expected to grow positively in 2015,” Katoma said.