2014-03-17 07:14:01 - Namibia Business Forecast Report Q1 2014 - a new country guide report on companiesandmarkets.com
We expect economic growth to pick-up, albeit modestly, in 2014 amid an improvement in global demand for Namibia´s principal exports and a recovery in the agricultural sector. Nevertheless, we maintain that the headwinds faced by the economy in 2013, while easing, will remain a drag on growth over the coming months and we predict real GDP growth in 2014 of 4.5%.
Stable inflationary conditions and a slight softening in the country´s growth prospects should see monetary policy remaining broadly accommodative over the near term and we expect the benchmark interest rate to remain steady at 5.50% throughout 2014.
The latest data from the Bank of Namibia have prompted us to revise down our 2013 growth estimate to 4.1% (from 4.4% previously), mainly
on account of higher than expected import demand arising from drought-hit sectors such as agriculture and power.
New and revised historical balance of payments data published by the Bank of Namibia have prompted changes to our forecasts for Namibia´s current account. We now predict a current account shortfall equal to 2.3% of GDP in 2014 and 3.0% of GDP in 2015 (compared to 3.6% and 4.1% previously).
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.
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