The International Monetary Fund (IMF) has revised downwards Namibia’s growth forecast for 2021 by 1%, as it lowered the global growth forecasts.
The global lender also projected the global economy to grow by 5.9% in 2021 and 4.9% in 2022, 0.1% point lower for 2021 than its July forecast.
In its latest World Economic Outlook, the IMF said Namibia’s gross domestic product (GDP) will now grow by 1.3% this year.
The IMF’s forecast is ,however, not line with the Bank of Namibia (BoN) estimates, which expect the 2021 GDP to grow by 1.4% from a previous forecast of 2.7% announced in February 2021.
For 2022, the IMF said the Namibian economy will grow by 3.6% against 3.4% forecasted by BoN, as the recovery from the COVID-19 pandemic stabilises.
“The IMF’s 1.3% growth forecast for 2021 is low, both compared to domestic forecasts and the large contraction reported for 2020. However, the growth recovery this year has been incredibly poor – largely on the back of continued weaknesses in the primary and secondary industries, as well as the financial and insurance service activities. This has been reported in the quarterly national accounts for both the first and second half of the year,” Cirrus Capital Head of Research, Robert McGregor told The Brief.
“Our forecasts for 2021 and 2022 are slightly more optimistic, however these are still low compared to the weak base from 2020 and the growth levels prior to 2016. The recovery is largely because of the base effect and expectations of improved mineral output over the next 18 months. Even at more optimistic growth forecasts, Namibia will take more than a decade to return to her 2015 peak of real GDP per capita.”
Simonis Storm Economist Theo Klein, however, forecasts the domestic economy to contract by -0.3% and is doubtful of growth of more than 3% in the remaining two quarters of the year.
“We forecast -0.3% GDP contraction for 2021, compared to forecasts from other local experts who foresee positive growth in the range of 1.4% to 2.2%. To reach positive growth in 2021, our economy has to grow by more than 3% in quarters three and four each of this year. Given that our economy only grew by 1.6% in the second quarter, we remain very doubtful that quarters three and four can record growth in excess of 3% each because we experienced the hardest part of our national lockdown in the second quarter of 2020, providing the lowest base in years to grow from,” he said.
The domestic economy recorded a contraction of 8% last year, relative to a decline of 0.6% registered in 2019, the highest contraction that Namibia has recorded looking at the time series of 1981 – 2020.
