Windhoek – Namibia has revised its 2021 economic growth prospects to 2,7 percent from 2,6 percent, thanks to an anticipated improved global economic performance projected at 5.5 percent.
In an update this week, Director of Strategic Communication and Financial Sector Development at the Bank of Namibia Dr Emma Haiyambo said the country expected solid performance in sectors such as tourism due to the rollout of COVID-19 vaccination programmes globally.
The Namibian central bank’s revised outlook is also influenced by the latest projections in the IMF’s World Economic Outlook.
The IMF projects stronger recovery in global growth during 2021 and 2022, based on multiple vaccine approvals, the launch of vaccinations in many countries and additional stimulus policy measures.
The institution forecasts Sub-Saharan economic growth at 3.2 percent and 3.9 percent in 2021 and 2022, from a contraction of 2.6 percent in 2020.
In Namibia’s case, Dr Haiyambo said: “Domestic growth is expected to increase during 2021 and 2022, with improvements coming from all major industries. The domestic economy is projected to grow by 2.7 percent and 3.3 percent in 2021 and 2022, respectively, making a recovery from an estimated contraction of 7.3 percent in 2020. These improvements are attributed to broad based base effects as well as better growth prospects for diamond mining, agriculture and transport sectors from 2021 onwards.
“The latest overall growth estimate of 2.7 percent for 2021 represents a slight improvement from 2.6 percent published in the December 2020 Economic Outlook update. Information obtained from the latest consultations with industries indicated that growth is likely to be broad based. Risks to domestic growth remain dominated by the impact of the COVID-19 pandemic on the domestic economy, mainly regarding the success of vaccinations in Namibia and around the globe.”
She added that, “Travel restrictions which are still in place in many countries, exacerbated by the second wave of coronavirus infections, remain the real threat to growth.
“Other notable risks to the domestic growth outlook include the persistently low international prices for some of Namibia’s export commodities such as uranium, as well as climatic swings. Namibia is prone to floods in the northern parts of the country, which are likely to occur in 2021, following good rainfalls received.”