A general view of the city of Windhoek, Namibia, February 24, 2017. REUTERS/Siphiwe Sibeko
WINDHOEK (Reuters) – The International Monetary Fund (IMF) projects that Namibia’s GDP will contract in 2018, pushing out its forecast for growth to next year when it sees support from strong mining production and a rebound in construction activities.
Namibia’s economy is forecast to contract 0.2 percent this year, down from a previous forecast of 1 percent growth, due to a weak performance in the manufacturing and construction sectors, the finance ministry has said.
The diamond and uranium producer’s economy contracted by 0.9 percent in 2017.
Geremia Palomba, who led the IMF team, said growth would gradually recover.
“After years of robust growth, the economy has entered a recession phase…IMF staff anticipates that the economy will recover gradually,” Palomba said in a statement
He said growth would strengthen at a long-term rate of about 3 percent, but gave no specific time frame. He added that growth would be below the average recorded in recent years, held back by low productivity growth and stagnant competitiveness.
Namibia’s GDP has averaged 4.29 percent since independence in 1990
Palomba said the downside risks to the IMF’s outlook included lower-than-expected revenue from the Southern Africa Customs Union (SACU), slower growth recovery, and fiscal slippage.
Reporting by Nyasha Nyaungwa; Editing by James Macharia and Kirsten Donovan