The performance of the domestic economic activity has improved during the second quarter of this year despite elevated inflation, tighter financial conditions, economic downturns in China and Russia, and weaker consumer spending in the USA.
According to Bank of Namibia’s (BoN) Director of Strategic Communications and International Relations Kazembire Zemburuka, the mining sector and agricultural sector showed improved performances.
“During the second quarter of 2022, activity in the domestic economy increased, supported by the primary and tertiary industries. Available indicators show that the improved activity was particularly reflected in the mining sector, where the production of most key minerals such as diamonds, gold, and copper concentrate increased. Similarly, the agriculture sector was marked by an increase in marketing activity for cattle and small stock. Improved performance was also observed in the tertiary industry, particularly in sectors such as tourism and transport. The tourism sector recorded a
substantial recovery which was due to increased tourist arrivals as more travel restrictions were lifted. Likewise, all categories of cargo transport also recovered,” stated Zemburuka.
However, he said, that the construction sector’s poor performance persisted, attributed to slower construction work in both the public and private sectors.
Furthermore, Zemburuka stated that Namibia’s inflation rate rose during the second quarter of 2022, which was mainly driven by an increase in transport inflation and conflict in Russia.
“Inflation rose to 5.7 percent during the second quarter of 2022, from 3.9 percent during the corresponding quarter of 2021. The rise in inflation was mainly driven by an increase in the inflation for transport, mainly owing to a rise in the international prices of oil, in turn, largely ascribed to the conflict in eastern Europe. On a monthly basis, inflation rose to 7.3 percent in August 2022 from 6.8 percent registered during the previous month, mainly attributed to an increase in transport inflation and food and non-alcoholic beverages,” he said.
Additionally, the Central Government’s debt stock rose over the year to the end of June this year.
Zemburuka said the Government’s total debt as a percentage of GDP stood at 68.2 percent at the end of June, accounting for a yearly increase of 0.4 percentage points and it was driven by a rise in the issuance of both Treasury Bills (TBs) and Internal Registered Stock (IRS).
However, external debt declined year-on-year owing to the redemption of one of the Eurobonds in November last year.
The International Monetary Fund (IMF) predicted that global economic growth would fall from 6.1 percent in 2021 to 3.2 percent in 2022 and then to 2.9 percent in 2023, owing largely to the impact of the Russia-Ukraine conflict.
“The US, UK, Euro Area, and China registered slowed growth during the second quarter of 2022, while Russia’s economy shrank. In contrast, the economies of Japan, South Africa, Brazil, and India registered expansions during the quarter under review,” he added.