INTERNATIONAL – Namibia's economy is projected to gradually emerge from recession in 2020 with a moderate growth rate of about 0.8 percent and about 1.3 percent by 2021, averaging 2 percent over the next Medium Term Expenditure Framework (MTEF), a government official said.
For this year the economy is estimated to contract by about 1.5 percent relative to the growth rate of 0.2 percent estimated in the Budget, Namibia's Minister of Finance, Calle Schlettwein said in his Mid-Term budget review policy statement for 2019/20 he delivered on Tuesday.
"This marks a third consecutive year of recession," he added.
According to Schlettwein, on the demand side, the government expects a moderate recovery in domestic consumption demand and other elements of final demand as some of the planned public and private sector investments come online and the rebound of exports from mining activity.
"The projected recovery in the primary industry sector is expected to perform better in the mining and agricultural sectors as temporary factors in the diamond sub-sector and rain prospects improve," he added.
"While the economy is projected to recover in 2020 and over the next MTEF, the projected pace of recovery is low and insufficient to translate into real growth in per capita incomes," he said.
Meanwhile, the minister said timely implementation of targeted measures, private sector investment commitments and structural policy reforms are prerequisites to improve both the pace and quality of future growth.
Calle Schlettwein said the country will implement fiscal consolidation to support its domestic economy after Fitch Ratings' downgrade.
Fitch Ratings, a major global ratings agency, on Tuesday downgraded Namibia's Long-Term Foreign-Currency Issuer Default Rating from "BB+" to "BB".