Windhoek – The Bank of Namibia (BoN) this week maintained the 2021 growth forecast at 2.7 percent despite the domestic economy remaining weak during the first four months of the year.
BoN Governor Mr Johannes !Gawaxab said the growth prospects hinged on global economic activity which improved somewhat in the first quarter of 2021 compared to the previous three months.
He noted that the IMF projected the global economy to grow by six percent in 2021 and 4.4 percent in 2022 as COVID-19 vaccinations became more widespread and economic activity somewhat normalised.
In a Monetary Policy Statement in which he kept the prime lending (repo) rate at 3.5 basis points, Mr !Gawaxab said activity in the wholesale and retail sectors, as well as the telecommunications subsector, had recorded growth in the first quarter.
“Recent monthly indicators showed that the mining, as well as the transport and storage sectors gained some momentum. Going forward, the domestic economy is expected to grow by 2.7 percent in 2021,” he said
The central bank governor, however, said uncertainties and risks remained and would hamstring economic performance.
Mr !Gawaxab added that the successful procurement and expeditious rollout of COVID-19 vaccines in Namibia remained key to speedy economic recovery.
On inflation, Mr !Gawaxab flagged increases in food and housing costs.
“Annual average inflation increased to 3.2 percent during the first five months of 2021, compared to 2.1 percent for the corresponding period in the previous year,” he added.