Image credit: Stuart Miles (Stockvault)
The Namibian economy is set to contract by a record 5% in 2020 despite the easing of temporary disruptions to the mining sector and an acute drought which led to a 1.1% decline in 2019, according to Fitch Ratings.
It said in a rating action commentary that the fall in global demand for luxury goods and manufacturing inputs as well as disruption to the global gemstone supply chain are dampening exports of diamonds and other mining products.
Fitch has forecast Namibia’s GDP to rise by 3% in 2021, assuming a near-term easing of disruption from the health crisis.
“However, the medium-term growth outlook remains subdued, reflecting weak activity in key partners South Africa and Angola, the depletion of onshore diamond and zinc deposits and fishery stocks, as well as strained water supply,” it said.
Namibia's GDP has fallen by an average of 0.2% per year in 2016-2019.
Protracted economic weakness and currency depreciation have led to significant deterioration in GDP per capita in US dollar terms, and Fitch has forecast a 25% drop below its 2012 peak.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
