IMF paints bleaker picture for Namibia
The IMF now expects Namibia's gross domestic product to expand by 1.1% this year, down from 1.2% in April.
Jo-Maré Duddy
The International Monetary Fund (IMF) has cut its economic growth forecast for Namibia for the three years to 2020.
The IMF now expects Namibia's gross domestic product (GDP) to expand by 1.1% this year, down from 1.2% in April. The growth projection for Namibia is way below the average of 3.1% forecast for sub-Saharan Africa in 2018.
Next year, the IMF anticipates growth of 3.1%, down from its previous forecast of 3.3% and lower than the regional estimated average of 3.8%.
In its World Economic Outlook released yesterday, the IMF said Namibia's economic in 2020 is now forecast at 3.4%, lower than the expected 3.5% in April. The average forecast for sub-Saharan Africa is 4.1%.
For 2018 and 2019, the IMF's predication for Namibia's balance on its current blanace is -6.0% compared to -7.6% respectively. In April it was -3.6% and -5.1%. For 2020, the forecast is -5.5% compared to -8.3% in April.
The average for the region is -2.8% (2018), -3.4% (2019) and -3.4% (2020).
The IMF expects inflation in Namibia to average 2.9% this year, significantly lower than the regional forecast of 8.8%. Next year's projection for Namibia is 5.8% compared to the 8.2% for sub-Saharan Africa.
Global outlook
The US-China trade war will hobble global growth, the IMF warned, cutting its forecast for this year and the next and predicting that “everyone is going to suffer” from a clash between the world's two biggest economies.
At a meeting on the Indonesian island of Bali, the IMF painted a cautious picture for the near future, saying trade tensions and rising debt levels could dent China and the US - and leave developing economies especially vulnerable to sudden stresses.
“There is no denying that the susceptibility to large global shocks has risen,” the IMF's top economist Maurice Obstfeld told reporters after the fund cut its outlook for global GDP growth by 0.2 percentage points to 3.7% for 2018 and 2019.
It is the first time the fund has cut its forecast in more than two years.
Tensions
Tensions have soared in recent months with Donald Trump's administration rolling out billions of US dollars in tariffs against China in a bid to tackle its trade deficit and rein in what Washington views as unacceptable trade practices by the Asian giant.
China has responded in kind with its own barrage of levies, rattling nerves especially among other Asian economies and already vulnerable countries like Argentina, Turkey and Brazil.
“Trade policy reflects politics and politics remains unsettled in several countries, posing further risks,” Obstfeld said.
The dominant US economy has been shielded so far from the ill-effects of the trade war, thanks to stimulus through tax cuts and spending policies, but that will wear off by 2020, the IMF said.
'At odds'
When the world's two biggest economies are “at odds”, Obstfeld said, that is going to create “a situation where everyone is going to suffer”.
Growth estimates for the euro area and Britain were also revised down with the report warning that growth “may have peaked in some major economies”.
Finance ministers and central bankers from many of the IMF's 189 member nations are meeting in Bali this week with talk of rising protectionism taking centre stage.
The IMF report said “protectionist rhetoric” was being “increasingly turned into action”, warning such uncertainty “could lead firms to postpone or forgo capital spending and hence slow down growth in investment and demand”.
Trade
Global trade is projected to expand by 4.2% this year - 0.6% less than expected in July - dropping to 4% next year.
Obstfeld, who retires from the fund later this year, said there were bright spots with some Latin American and African nations getting growth forecast upgrades.
The fund urged governments to focus on policies that can share the benefits of growth more widely, helping counter the growing mistrust of institutions, and to avoid “protectionist reactions to structural change”.
And it stressed “cooperative solutions” to help boost continued growth in trade “remain essential to preserve and extend the global expansion”.
Growth
With US GDP growth expected to drop from 2.9% this year to 1.8% by 2020, the IMF also warned about the potential risk of an “inflation surprise”, fuelled by the same tax cuts and rising spending used to cushion the impact from the trade war. That could result in higher-than-expected interest rates from the Federal Reserve and stock market uncertainty.
Fed rate hikes are already increasing pressure on emerging market economies by fuelling an outflow of capital as investors seek higher returns.
US stimulus also adds to the “already-unsustainable” debt and deficit that will undercut future growth, the report warned.
In export-heavy China, which is less able to mitigate the fallout from tariffs, the trade war is already having an impact, the IMF said.
Growth is projected to slow to 6.6% this year and 6.2% in 2019, a downgrade of 0.2 percentage points.
Further out, China's economic growth is expected to slow gradually to 5.6% as the government shifts to “a more sustainable growth path” and addresses financial risks, the IMF said. – Own report and Nampa/Reuters
The International Monetary Fund (IMF) has cut its economic growth forecast for Namibia for the three years to 2020.
The IMF now expects Namibia's gross domestic product (GDP) to expand by 1.1% this year, down from 1.2% in April. The growth projection for Namibia is way below the average of 3.1% forecast for sub-Saharan Africa in 2018.
Next year, the IMF anticipates growth of 3.1%, down from its previous forecast of 3.3% and lower than the regional estimated average of 3.8%.
In its World Economic Outlook released yesterday, the IMF said Namibia's economic in 2020 is now forecast at 3.4%, lower than the expected 3.5% in April. The average forecast for sub-Saharan Africa is 4.1%.
For 2018 and 2019, the IMF's predication for Namibia's balance on its current blanace is -6.0% compared to -7.6% respectively. In April it was -3.6% and -5.1%. For 2020, the forecast is -5.5% compared to -8.3% in April.
The average for the region is -2.8% (2018), -3.4% (2019) and -3.4% (2020).
The IMF expects inflation in Namibia to average 2.9% this year, significantly lower than the regional forecast of 8.8%. Next year's projection for Namibia is 5.8% compared to the 8.2% for sub-Saharan Africa.
Global outlook
The US-China trade war will hobble global growth, the IMF warned, cutting its forecast for this year and the next and predicting that “everyone is going to suffer” from a clash between the world's two biggest economies.
At a meeting on the Indonesian island of Bali, the IMF painted a cautious picture for the near future, saying trade tensions and rising debt levels could dent China and the US - and leave developing economies especially vulnerable to sudden stresses.
“There is no denying that the susceptibility to large global shocks has risen,” the IMF's top economist Maurice Obstfeld told reporters after the fund cut its outlook for global GDP growth by 0.2 percentage points to 3.7% for 2018 and 2019.
It is the first time the fund has cut its forecast in more than two years.
Tensions
Tensions have soared in recent months with Donald Trump's administration rolling out billions of US dollars in tariffs against China in a bid to tackle its trade deficit and rein in what Washington views as unacceptable trade practices by the Asian giant.
China has responded in kind with its own barrage of levies, rattling nerves especially among other Asian economies and already vulnerable countries like Argentina, Turkey and Brazil.
“Trade policy reflects politics and politics remains unsettled in several countries, posing further risks,” Obstfeld said.
The dominant US economy has been shielded so far from the ill-effects of the trade war, thanks to stimulus through tax cuts and spending policies, but that will wear off by 2020, the IMF said.
'At odds'
When the world's two biggest economies are “at odds”, Obstfeld said, that is going to create “a situation where everyone is going to suffer”.
Growth estimates for the euro area and Britain were also revised down with the report warning that growth “may have peaked in some major economies”.
Finance ministers and central bankers from many of the IMF's 189 member nations are meeting in Bali this week with talk of rising protectionism taking centre stage.
The IMF report said “protectionist rhetoric” was being “increasingly turned into action”, warning such uncertainty “could lead firms to postpone or forgo capital spending and hence slow down growth in investment and demand”.
Trade
Global trade is projected to expand by 4.2% this year - 0.6% less than expected in July - dropping to 4% next year.
Obstfeld, who retires from the fund later this year, said there were bright spots with some Latin American and African nations getting growth forecast upgrades.
The fund urged governments to focus on policies that can share the benefits of growth more widely, helping counter the growing mistrust of institutions, and to avoid “protectionist reactions to structural change”.
And it stressed “cooperative solutions” to help boost continued growth in trade “remain essential to preserve and extend the global expansion”.
Growth
With US GDP growth expected to drop from 2.9% this year to 1.8% by 2020, the IMF also warned about the potential risk of an “inflation surprise”, fuelled by the same tax cuts and rising spending used to cushion the impact from the trade war. That could result in higher-than-expected interest rates from the Federal Reserve and stock market uncertainty.
Fed rate hikes are already increasing pressure on emerging market economies by fuelling an outflow of capital as investors seek higher returns.
US stimulus also adds to the “already-unsustainable” debt and deficit that will undercut future growth, the report warned.
In export-heavy China, which is less able to mitigate the fallout from tariffs, the trade war is already having an impact, the IMF said.
Growth is projected to slow to 6.6% this year and 6.2% in 2019, a downgrade of 0.2 percentage points.
Further out, China's economic growth is expected to slow gradually to 5.6% as the government shifts to “a more sustainable growth path” and addresses financial risks, the IMF said. – Own report and Nampa/Reuters
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