2013-10-27 18:34:20 - New Country Reports research report from Business Monitor International is now available from Fast Market Research
The effects of a weak global economy and a damaging drought will continue to be felt by Namibia's economy over the coming months.
Growth should, however, remain supported by as elevated levels of government spending are maintained. We expect real GDP growth to pick-up modestly in 2014, with BMI forecasting 4.7% growth compared to an estimated 4.3% in 2013.
We expect inflation to remain relatively stable over the coming months, although we believe inflationary risks are weighted firmly to the upside given the ongoing currency woes.
Major Forecast Changes
We have modestly downgraded our projections for the fiscal deficit in 2013 and 2014 given rising spending commitments, particularly in the form of ongoing drought relief measures. We are now forecasting shortfalls equal to 6.7%
of GDP in 2013 (compared to our previous estimate of 6.6%) and 4.7% in 2014 (compared to 4.2%).
Full Report Details at
- www.fastmr.com/prod/694764_namibia_business_forecast_report_q4_2 ..
Significant revisions made by the Bank of Namibia to their balance of payments data have prompted us to revised down our forecasts for the current account deficit in 2013 and 2014 to 3.0% (from 2.6% previously) and 3.6% (from 3.2%) respectively.
Key Risk To Outlook
Namibia's small, open economy is highly exposed to events on the world stage. While we have incorporated the ongoing global malaise into our economic forecasts, if the situation abroad deteriorates (or, conversely, improves) more than we anticipate, we would have to adjust our forecasts accordingly. Much of the economy remains closely tied to agriculture, and weather poses substantial risks, as illustrated by the ongoing drought which has threatened yields and food security. Changing weather conditions pose both upside and downside risks to a number of our forecasts, including for growth, inflation, and trade.
Partial Table of Contents:
Major Forecast Changes
Chapter 1: Political Outlook
BMI Political Risk Ratings
Stern Challenges Ahead For Ruling Party, But Position Secure
- The South West Africa People's Organisation (SWAPO) will come under growing pressure to respond more effectively to pressing public issues such as widespread drought and high unemployment. With elections just over 12 months away these already-thorny issues are likely to become even more politicised as opposition groups seek to capitalise.
TABLE: Political Overview
Stability Likely To Prevail Over The Coming Decade
- While Namibia's enormous income inequality poses some risks to political stability, we believe the population is likely to continue supporting the SWAPO government for the next 10 years, ensuring broad political stability and continuity.
Chapter 2: Economic Outlook
BMI Economic Risk Ratings
Growth To Pick Up In 2014, But Exports Remain A Drag
- The effects of a weak global economy and a damaging drought will continue to be felt by Namibia's economy over the coming months. Following an estimated expansion of 4.3% in 2013, we expect real GDP growth to pick-up modestly in 2014, with BMI forecasting 4.7% growth.
TABLE: ECONOMIC ACTIVITY
Rate Hikes Expected In 2014
- The Bank of Namibia's decision to keep its benchmark interest rate steady at 5.50% is in line with our view that no adjustments are likely over the remainder of 2013.
TABLE: MONETARY POLICY
Balance Of Payments
New Data, Growing Imports Prompt C/A Downgrade
- Due to historical revisions and the latest quarterly data, published by the Bank of Namibia, our outlook for the country's balance of payments position has weakened.
TABLE: CURRENT ACCOUNT
Fiscal Deficit To Narrow Gradually From FY2013/14
- We have made modest downward revisions to our forecasts for Namibia's budget balance in FY2013/14 and FY2014/15 owing to the prospect increased spending pressures over the short term.
TABLE: FISCAL POLICY
Chapter 3: 10-Year Forecast
The Namibia Economy To 2022
Robust Growth Expected To 2022
- Thanks to the country's strong primary sector, we expect growth to prove relatively robust in the long run, averaging around 4.6% annually over 2013 to 2022. With a stable political environment, the main risks are the limited size of the domestic market, rising income inequality and global demand for the country's primary exports.
TABLE: Long-Term Macroeconomic Forecasts
Chapter 4: Business Environment
BMI Business Environment Risk Ratings
Business Environment Outlook
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
Table: BMI LEGAL FRAMEWORK RATING
Table: LABOUR FORCE QUALITY
TABLE: ANNUAL FDI INFLOWS
Table: TRADE AND INVESTMENT RATINGS
Chapter 5: Key Sectors
TABLE: Healthcare Expenditure Trends, Historical Data And Forecasts
TABLE: Pharmaceutical Sales, Historical Data And Forecasts
Full Table of Contents is available at:
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