Windhoek - Namibia's Gross Domestic Product (GDP) growth rate is projected to recover slightly to 0.3% in 2019, before improving to 1.9% in 2020.
Based on the International Monetary Fund’s World Economic Outlook update for April 2019, there is a slowdown in global output growth.
These findings are contained in the Bank of Namibia’s (BoN) latest Economic Outlook Update, availed to the media on Monday.
According to the outlook, the expected recovery during 2019 will mainly be supported by anticipated improvements in the construction and hotel and restaurant sectors.
A smaller contraction is projected for the wholesale and retail trade, representing a reduced drag on overall growth compared to the last two years.
However, the latest overall growth projection of 0.3% for 2019 represents a downward revision from 1.5% published during December 2018 as a result of the growth estimates for diamonds, uranium and metal ore that are lower than what was anticipated.
The domestic growth is at risk because of persistently low uranium prices and unpredictable rainfall, the BoN stated.
The low uranium price increases uncertainty about expected production from uranium mines, while the erratic rainfall may continue to negatively affect the performance of the agriculture sector beyond 2019.
Furthermore, the China and United States (US) trade tensions may negatively affect the demand for Namibian minerals.
The global growth rate, estimated at 3.6% in 2018, is projected to decline to 3.3% in 2019 and stabilise to 3.6% in 2020.
The balance of risks to the outlook remains mainly on the downside.
The global downshift in output growth is largely attributed to waning cyclical forces in advanced economies as output gaps have been largely closed.
Risks to the global growth outlook remain and include the possible collapse of the China and US trade negotiations, escalation of trade tensions to other countries and a no-deal withdrawal of the United Kingdom from the European Union.
Over the medium term, the key risks include climate change and political discord in the context of rising inequality. - Nampa