Nam repo rate unchanged for third consecutive time
By Magreth Nunuhe
Windhoek – The Namibian repo rate has remained a constant 6.75 percent for the third consecutive time this year, following a review of the global, regional and domestic economic and financial developments, the Governor of the Bank of Namibia, Iipumbu Shiimi, announced on Wednesday.
Adding to the good news is Namibia’s inflation, which has taken a nose dive, decelerating from an old-time high of 8.2 percent in January 2017 to 5.2 percent in October 2017, and averaging around 6.4 percent during the first 10 months of 2017.
This is lower than the corresponding period in 2016 when inflation averaged 6.6 percent.
However, when it comes to economic activity, Namibia’s domestic sectors remained weak during the months of January to October 2017, mainly reflected in the construction, wholesale, retail trade and transport sectors.
However, key economic activities, such as mining, the number of livestock marketed, communication and manufacturing output improved over the same period.
Credit extended to private sector slowed down and averaged to an all-time low of 7 percent, lower than the 11.8 percent recorded over the same period in 2016.
“The slower growth in PSCE (Private Sector Credit Extension) is due to reduced growth in credit advanced to both the household and corporate sectors, especially in the form of mortgage and instalment credit,” said Shiimi, adding that the last Monetary Policy Meeting, the growth in PSCE slowed to 5.2 percent.
Namibia’s international reserves surged up to R31.6 billion as at 31 October 2017, representing an increase on both the monthly and annual basis.
This was due to higher Southern African Customs Union receipts, debt repayment by Banco Nacional De Angola (National Bank of Angola) and the African Development Bank loan.
“At this level, the stock of international reserves is estimated to cover 5.1 months of imports of goods and services and thereby remains sufficient to sustain the currency peg between Namibia Dollar and South African rand,” said Shiimi.
On the global economic front, the economy is projected to grow by 3.6 percent in 2017, up from 3.2 percent in 2016, on account of somewhat higher growth in both the Advanced Economies (AEs) and the Emerging Markets and Developing Economies.
Economic activity in the AEs improved in the third quarter of 2017, compared to the second quarter of 2017, mainly by the US and the Euro area.
“Going forward, economic activity in the AEs as a whole is expected to improve with estimated growth of 2.2 percent in 2017, compared to 1.7 percent in 2016, supported by stronger investment and expansion in manufacturing and service activity,” added Shiimi.