Positive prospects for the Namibian economy
Mining and tourism to drive growth
According to PSG Wealth's Economic Outlook, economic growth will accelerate to 3.5% in 2022.
The domestic economy is expected to grow further this year, following a 2.4% gross domestic product growth recorded in 2021.
According to PSG Wealth’s Economic Outlook, economic growth will accelerate to 3.5% in 2022 on the back of increased mining output and improved tourist arrivals.
The industrial sector is set to benefit from planned expansions of existing diamond and copper operations, the possible resuscitation of mothballed zinc and uranium mines, the development of new ‘battery mineral’ mines; and increased oil and gas exploration, PSG said.
“We expect the external environment to be supportive of Namibian industrial exports in 2022, barring a major escalation of the Ukraine war and prolonged lockdowns in China. The Namibian government is also aiming to leverage Namibia’s excellent solar power and green hydrogen potential. Sanctions on Russian gas exports will help to expedite the switch to greener energy sources,” PSG added.
The agricultural sector will continue to be burdened by depleted livestock numbers that will take years to rebuild following successive years of drought. Moreover, the livestock industry in southern Namibia is facing a major challenge in the form of a brown locust plague. The recent good rainfalls should ensure another above- average maize harvest in the second quarter of 2022, although it could fall short of the previous season’s record-breaking performance, PSG said.
The services sector will continue to be hamstrung by frugal fiscal expenditure, deteriorating real disposable incomes, higher unemployment, and high consumer indebtedness. Tourism already lagged ahead of the pandemic due to poor regional growth and has suffered immensely due to coronavirus-related travel restrictions. “We expect tourism will recover gradually to pre-pandemic levels by 2024.”
In March the hospitality industry’s occupancy rate stood at 28%, 8 points higher compared to the same month in 2021, but trailing the pre-pandemic occupancy rate of 45%, PSG pointed out.
PSG notes that higher inflation, owing to supply constraints caused by the Russia-Ukraine war and the ongoing global pandemic, will put a damper on growth via weaker consumer spending. The Ministry of Mines and Energy yesterday announced an increase in fuel prices which is expected to add more pressure on consumers. The price of petrol will increase by N$2.50 per litre, while diesel will increase by N$1.50 per litre as from tomorrow.
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According to PSG Wealth’s Economic Outlook, economic growth will accelerate to 3.5% in 2022 on the back of increased mining output and improved tourist arrivals.
The industrial sector is set to benefit from planned expansions of existing diamond and copper operations, the possible resuscitation of mothballed zinc and uranium mines, the development of new ‘battery mineral’ mines; and increased oil and gas exploration, PSG said.
“We expect the external environment to be supportive of Namibian industrial exports in 2022, barring a major escalation of the Ukraine war and prolonged lockdowns in China. The Namibian government is also aiming to leverage Namibia’s excellent solar power and green hydrogen potential. Sanctions on Russian gas exports will help to expedite the switch to greener energy sources,” PSG added.
The agricultural sector will continue to be burdened by depleted livestock numbers that will take years to rebuild following successive years of drought. Moreover, the livestock industry in southern Namibia is facing a major challenge in the form of a brown locust plague. The recent good rainfalls should ensure another above- average maize harvest in the second quarter of 2022, although it could fall short of the previous season’s record-breaking performance, PSG said.
The services sector will continue to be hamstrung by frugal fiscal expenditure, deteriorating real disposable incomes, higher unemployment, and high consumer indebtedness. Tourism already lagged ahead of the pandemic due to poor regional growth and has suffered immensely due to coronavirus-related travel restrictions. “We expect tourism will recover gradually to pre-pandemic levels by 2024.”
In March the hospitality industry’s occupancy rate stood at 28%, 8 points higher compared to the same month in 2021, but trailing the pre-pandemic occupancy rate of 45%, PSG pointed out.
PSG notes that higher inflation, owing to supply constraints caused by the Russia-Ukraine war and the ongoing global pandemic, will put a damper on growth via weaker consumer spending. The Ministry of Mines and Energy yesterday announced an increase in fuel prices which is expected to add more pressure on consumers. The price of petrol will increase by N$2.50 per litre, while diesel will increase by N$1.50 per litre as from tomorrow.
– [email protected]
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