THE country’s GDP growth has continued to decelerate in 2016 as the blighting drought across southern Africa intensifies, the research manager at FNB Namibia Namene Kalili said yesterday.
He said although the weakness was spread across most sectors, it remained most severe in the agricultural, mining and construction sectors.
Water shortages will constrain output in the water-intensive agriculture, mining and construction sectors, while the completion of several key infrastructural projects will add downward pressure on construction activity.
Kalili expects diamond recoveries to improve in the second half of this year, once the world’s most advanced marine diamond sampling and exploration vessel, the mv SS Nujoma, is commissioned.
“As water pressures and other headwinds mount, growth is expected to decelerate to 3,1% in 2016, and recover moderately to 4,5% in 2017 and 6,7% in 2018,” he said.
He added that rising inflation, lacklustre employment growth and higher interest rates constrained real disposable income growth.
“Accordingly, the economy is unlikely to experience a meaningful increase in household consumption growth. The current account widened, following the deterioration of the trade account, coupled with a decline in Southern African Customs Union transfer receipts,” Kalili noted.
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