Consumption expected to ease considerably
Affordability
Private final consumption expenditure in 2022 accounted for 78.2% to GDP compared to a share of 75.8% in 2021.
Due to high interest rates and elevated inflation, personal consumption growth is expected ease significantly in 2023, PSG said.
According to the Namibia Statistics Agency (NSA), private final consumption expenditure in 2022 accounted for 78.2% to gross domestic product (GDP) compared to a share of 75.8% to GDP registered in 2021.
Taking inflation into account, the final consumption expenditure registered a growth of 10.7% in 2022 compared to a growth of 9.5% posted in the preceding year.
Annual inflation average 7.1% in the first three months of 2023, compared to 4.5% recorded during the first quarter of 2022.
In value terms, real GDP was estimated at N$144.1 billion in 2022, while nominal GDP was estimated at N$206.2 billion in 2022.
“Despite domestic inflation remaining stuck near a six-year high in the first quarter of 2023, the Bank of Namibia (BoN) is tolerating a historically wide gap between the Namibian and South African repo rates due to concerns over the negative impact of fast-rising interest rates on consumers,” PSG said.
Year to date, the central bank increased the repo rate by 50 basis points from 6.75% to 7.25%. The prime lending rate stands at 11%.
“We still expect the central bank to raise its policy rate by a further 25 basis points to 7.50% in 2023. Meanwhile, we forecast the average inflation rate to moderate to 5.7% this year from 6.1% in 2022 thanks to weaker domestic growth and higher interest rates.”
The Bank of Namibia expects inflation to average 6.1% this year. The domestic economy grew by 4.6% last year, the best growth recorded since 2014, PSG pointed out.
Going forward, GDP growth is projected to slow down to 3% in 2023, due to the anticipated moderation in momentum in the primary and secondary industries, BoN [email protected]
According to the Namibia Statistics Agency (NSA), private final consumption expenditure in 2022 accounted for 78.2% to gross domestic product (GDP) compared to a share of 75.8% to GDP registered in 2021.
Taking inflation into account, the final consumption expenditure registered a growth of 10.7% in 2022 compared to a growth of 9.5% posted in the preceding year.
Annual inflation average 7.1% in the first three months of 2023, compared to 4.5% recorded during the first quarter of 2022.
In value terms, real GDP was estimated at N$144.1 billion in 2022, while nominal GDP was estimated at N$206.2 billion in 2022.
“Despite domestic inflation remaining stuck near a six-year high in the first quarter of 2023, the Bank of Namibia (BoN) is tolerating a historically wide gap between the Namibian and South African repo rates due to concerns over the negative impact of fast-rising interest rates on consumers,” PSG said.
Year to date, the central bank increased the repo rate by 50 basis points from 6.75% to 7.25%. The prime lending rate stands at 11%.
“We still expect the central bank to raise its policy rate by a further 25 basis points to 7.50% in 2023. Meanwhile, we forecast the average inflation rate to moderate to 5.7% this year from 6.1% in 2022 thanks to weaker domestic growth and higher interest rates.”
The Bank of Namibia expects inflation to average 6.1% this year. The domestic economy grew by 4.6% last year, the best growth recorded since 2014, PSG pointed out.
Going forward, GDP growth is projected to slow down to 3% in 2023, due to the anticipated moderation in momentum in the primary and secondary industries, BoN [email protected]
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