N$1.1 billion has been wiped out of the Namibian economy, largely attributed to the effects of COVID-19, third quarter figures from the Namibia Statistics Agency (NSA) show.
“In nominal terms, the size of the Namibian economy as measured by GDP at current prices was estimated at N$ 44.7 billion in the quarter under review relative to N$ 45.8 billion posted in the same quarter of 2019. This shows that GDP size shrunk by N$ 1.1 billion,” NSA Statistician – General and CEO, Alex Shimuafeni announced on Thursday.
“The third quarter of 2020 (July – September) is characterized by state of emergency measures instituted by the government as part of the effort to combat the spread of Covid-19 pandemic. These measures varied across regions depending on the severity of the cases recorded. These health-related measures that where put in place are reflected in the performance of the economy.”
According to the latest NSA third quarter of 2020 figures, the domestic economy contracted by 10.5 percent during the quarter compared to a decline of 2.1 percent recorded in the corresponding quarter of 2019.
“Thus far in the year of 2020, the economy has registered contractions of 1.4 percent in the first quarter, 10.1 percent in the second quarter, and 10.5 percent in the third quarter. The deeper contractions in the second and third quarters are due to the impact of the Covid-19 restrictions,” the NSA CEO said.
Hotels and restaurants which were negatively impacted by lockdown regulations during the period under review, registered the highest contraction.
“In real terms the poor performance of the economy during the third quarter of 2020 was observed across the major sectors of the economy with the hotels and restaurants registering the highest contraction of 54.9 percent, followed by mining and quarrying (-30.7 percent), ‘administrative and support services’ (-27.7 percent), manufacturing (-24.6 percent), ‘transport and storage’ (-23.6 percent) and fishing sector (-15.6 percent),” Shimuafeni said.
The information and communication and health sectors were the biggest gainers of the COVID-19 restrictions phase, amid high demand for data services and internet connectivity, and health workers during the period under review.
“Positive performance was observed in the ‘information and communication’ sector as demand for data services and internet connectivity surged from educational institutions, businesses and households during the reporting period. The sector registered a strong growth of 13.8 percent. The ‘health’ sector registered a growth of 10.3 percent growth because of high demand for health workers. Further, the ‘construction’ and ‘electricity and water’ sectors posted positive performance of 7.5 percent and 5.0 percent, respectively, during the period under review,” he said.
The Bank of Namibia (BoN) forecast that the domestic economy would contract another 7.3 percent this year, slightly better than the 7.8 percent contraction forecast in its October economic outlook.
In 2021 the economy is forecasted to grow by 2.6 percent, up from the October forecast of 2.1 percent.
In 2019 Namibia’s economy shrank 1.4 percent.