The Bank of Namibia (BoN) revealed in its Economic Outlook Update report for April 2020 that the Namibian economy is expected to contract by 6.9 percent in 2020, as against a mild contraction of 1.1 percent in 2019.
Released on Tuesday, April 28, 2020, BoN reports that last year’s economic contraction was caused by drought and falling output in sectors such as construction and retail, while the economic shutdown to tackle COVID-19 which hit tourism and damaged other sectors in Namibia caused a significant economic decline this year. “The deep contraction estimated for 2020 is attributed to the outbreak of the COVID-19 pandemic which led to travel restrictions and a lockdown in Namibia, as is the case with other countries globally,” BoN stated.
Issued by Emma Haiyambo BoN’s Director of Strategic Communications and Financial Sector Development, the update disclosed that risks to Namibia’s domestic growth are currently dominated by uncertainties. BoN suggested that this incertitude is largely attributed to the unknown duration of the coronavirus and the pandemic’s final impact on the economy. “Risks to domestic growth are dominated by ongoing travel restrictions, causing disruptions to supply. Other risks to domestic growth and outlook include the volatile and persistently low international prices of some of Namibia’s export commodities,” Haiyambo said.
The International Monetary Fund (IMF) projected that the world economy will contract by 3.0 percent this year, which is a sharp reversal from a positive growth rate of 3.3 percent published in the World Economic Outlook (WEO) update for January 2020. The downward revision to 2020 growth is largely attributed to anticipated lower industrial production and volatile commodity markets, primarily due to the worsened impact of the COVID-19 outbreak, IMF concluded.
Nevertheless, the WEO update for April 2020 affirmed that although the global economy is expected to contract substantially in 2020, it will recover moderately in 2021. Consequently, BoN is confident that the Namibian economy is set to recuperate gradually next year as global output is projected to expand by 5.8 percent in 2021.
Meanwhile, the number of COVID-19 confirmed cases in Namibia as of April 29, 2020, is at 16 with 8 recoveries and no deaths in the country.
