Economic Analysis - Growth Will Recover In 2018 - 02 OCT 2017


BMI View: Economic activity will accelerate over the coming quarters in Namibia, having struggled with significant fiscal constraints and limited investment in 2017. Major increases in mining output and growth in the agriculture sector will help drive a recovery in 2018.

We expect a recovery in Namibia's growth in 2018 due to our forecast of sustained growth in mining, alongside the consequent increase in fiscal revenues. Namibia's economy will likely remain weak in Q417, as we believe fiscal constraints - exacerbated by the August downgrade of the government's credit rating - will weigh on key sectors of the economy and counteract some of the effects of growth in mining. Namibia's Q217 GDP data has shown another quarter of contraction, significantly underperforming our expectations, leading us to revise downwards our forecast for real growth in 2017 to 0.2% and to 3.5% in 2018. We had believed that increases in mining output would help headline growth to buck the weak trend in 2017, but we now expect that the impact will be muted by the unexpectedly large contraction in other sectors. In 2018 we still maintain a positive outlook as mining and other sectors will see greater output, bolstering fiscal revenues and supporting demand in the wider economy.

Weak Data Drives 2017 Revisions

Mining To Spur Recovery In Growth
Namibia - Mining Production And Real GDP Growth
e/f = BMI estimate/forecast Source: National Sources,BMI

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