Foreign reserve drops indicate slow growth

09 January 2019 | Economics

PSG Namibia research analyst Shelly Arnold says real Gross Domestic Product growth remains sluggish.

Looking at the stock of foreign reserves (forex) which declined on a monthly basis during November 2018, according to the Bank of Namibia’s latest Money and Banking Statistics report, Shelly warned of an expected drop in SACU income this year.

The level of international reserves decreased to N$29.5 billion at the end of November from N$31.1 billion recorded in the previous month.

The decrease in the level of reserves is mainly due to “net capital outflows from the commercial banks as a result of increased foreign currency purchases coupled with net government payments and the exchange rate appreciation,” the central bank said.

Growth in private sector credit extension (PSCE) ticked higher in November. The PSCE growth rate was recorded at 7.3% y-o-y in November, slightly higher than October’s growth rate of 7.1% y-o-y.

Growth in total credit extended to the corporate sector increased to 7.6% y-o-y in November, up somewhat from 7.1% y-o-y recorded in the previous month.

The BoN attributes this growth to “the uptake of short-term credit facilities by businesses in the financial services and mining sectors during the period under review.”

Meanwhile, growth in credit extended to households was stable at 7% y-o-y in November, an unchanged rate compared to October.

Regarding money supply, broad money supply growth slowed to 7.5% y-o-y in November 2018 from 9,6% y-o-y in the previous month.

According to the central bank, this decrease in growth was underpinned by “continued contraction in the growth of the net foreign assets of the depository corporations, coupled with a decline in domestic claims”.

“Why do we care? Looking ahead, inflows from SACU are expected to be weaker than in recent years due to the lacklustre performance of the South African economy, which shrinks the SACU revenue pool.

“On the bright side, inflows from the African Development Bank loan agreement will continue to boost foreign reserves this year. In general, the growth in monetary aggregates is well below levels seen during the economic boom years of 2010-15 and suggests that real GDP growth remains sluggish,” said Shelly.

Similar News

 

Ramaphosa implicated in corruption allegations

2 hours ago | Economics

Democratic Alliance (DA) leader Mmusi Maimane on Thursday called on South African President Cyril Ramaphosa to cancel all existing government contracts with Bosasa and institute...

Retail industry records negative growth

2 hours ago | Economics

The wholesale and retail trade sector in Namibia has recorded various degrees of negative growth for eight consecutive quarters, a policy analyst at the Namibia...

Okakarara can become a logistics hub: Kandorozu

2 hours ago | Economics

The town of Okakarara in the Otjozondjupa Region has the potential to be transformed into a logistics hub, should all important roads leading to it...

Tame price monster smirks

1 day - 17 January 2019 | Economics

Jo-Maré Duddy Although Namibians enjoyed significant inflation relief last year in the two heavyweights in the consumer basket compared to 2017, they had to endure...

New boss for NDTC

1 day - 17 January 2019 | Economics

The Namibia Diamond Trading Company (NDTC) board of directors has announced the retirement of chief executive officer Shihaleni Ellis Ndjaba.Ndjaba had led the pioneering entity...

Coding for African girls

1 day - 17 January 2019 | Economics

Africa Code Week (ACW) 2018 exceeded all expectations by empowering 2.3 million young people from 37 African countries with digital and coding skills, compared to...

Hong Kong's red-hot property market cools

1 day - 17 January 2019 | Economics

For young Hong Kong residents like Wilson Leung getting a foothold on the city's property ladder has long been a near impossible task, but with...

Job desperation causes chaos

2 days ago - 16 January 2019 | Economics

Masses of unemployed people flocked to TransNamib in Ondangwa yesterday to apply for 40 posts that had been announced on radio. There were scenes...

Higher food, fuel prices expected

2 days ago - 16 January 2019 | Economics

Consumers should brace themselves for even more expensive food and fuel this year. Although motorists received a slight reprieve in fuel prices in December,...

SA regulator weighs Eskom price hike

2 days ago - 16 January 2019 | Economics

NAMPA/ANAAs the National Energy Regulator of South Africa (Nersa) on Monday began public hearings on Eskom's tariff increase application, pressure group SAFCEI suggested that the...

Latest News

NDF defies court order

2 hours ago | Justice

Four days after the Namibian Defence Force was ordered to vacate a Rehoboth shooting range it had illegally occupied in December, the army's locks remain...

Pensioner loses N$400k in scam

2 hours ago | Crime

A 60-year-old woman at Oshakati has lost N$405 000 in an extortion scam staged by fraudsters pretending to be police officers. The incident happened...

Ramaphosa implicated in corruption allegations

2 hours ago | Economics

Democratic Alliance (DA) leader Mmusi Maimane on Thursday called on South African President Cyril Ramaphosa to cancel all existing government contracts with Bosasa and institute...

Retail industry records negative growth

2 hours ago | Economics

The wholesale and retail trade sector in Namibia has recorded various degrees of negative growth for eight consecutive quarters, a policy analyst at the Namibia...

Not a walk in the...

2 hours ago | People

Elizabeth Joseph Business and economics have always fascinated Danny Meyer, the founder of SMEs Compete.For as long as he can remember, Meyer has always harboured...

New year, new CV

2 hours ago | Columns

In the modern era, the job market is fast and competitive and opportunities come in a blink of an eye. If you are not ready...

Parents angry about Andimba School...

2 hours ago | Education

Some parents are accusing the Andimba Toivo ya Toivo Senior Secondary School at Ondangwa of denying grade 12 learners hostel accommodation. They complained to Namibian...

Vote to secure your destiny

2 hours ago | Columns

The Electoral Commission of Namibia (ECN) announced this week it will start conducting supplementary registration for voters in July, ahead of the presidential and National...

Corruption - A social disease

2 hours ago | Columns

How to create reckoning during the Year of Accountability?This article focuses on options to capitalise on the recently proclaimed ‘Year of Accountability’. Given the fact...

Load More