Recession holds firm
The Namibian economy has contracted for a second consecutive quarter, with some sectors shrinking for a third or sixth quarter in a row.
Namibia is in a renewed recession, based on statistics for the three months ending June 2017.
The construction sector has shown negative growth for the sixth consecutive quarter and the retail and wholesale sectors have shown decline in growth for the third consecutive quarter.
In the second quarter of the year the economy grew by -1.7%, according to the latest figures released yesterday by the Namibia Statistics Agency (NSA).
Had there been no revision of growth during the last quarter of 2016, Namibia would have been in recession for its fifth consecutive quarter.
However, in the last quarter of last year, the NSA adjusted its growth rate from -1.4% to 0.3%. At the time, the move raised several eyebrows and Rowland Brown, co-founder of Cirrus Capital, tweeted that the budget had been largely cut during that quarter.
The latest figures indicate that since 2016, Namibia has not shown any growth. The second and third quarters of 2016 indicated growth of -0.4% en -0.3% respectively and the first two quarters of this year recorded growth of -1.7%.
Frans Uusiku, an economist with Simonis Storm, is of the view that even though the growth figures are in the red, the latest numbers indicate a strengthening of the economy.
For construction, growth in the last quarter stood at -51.9%, the worst figure since the sector's decline began in 2016. In the first quarter of 2017, it registered growth of -45% while growth was recorded at -32.2% in the first quarter of 2016.
According to Uusiku, the construction industry will remain in the grips of recession in the short to medium term due to the government's budget cuts.
The decline in the wholesale and retail sectors indicates a lack of business confidence as well as decreased demand, both locally and internationally. Furthermore, consumers remain under pressure, he says.
In the past quarter, this sector grew by -8.2% after it grew at -7.5% and -3% in the first two quarters respectively. In the second quarter of 2016, this sector grew at 10%.
Hotels and restaurants are now in a technical recession as they have shown decline for a second consecutive quarter. The past quarter indicated growth of -3%. In the first three months of the year, the industry grew by -7.3% and in the second quarter of last year, growth of -3.6% was recorded. According to Brown, the strengthening of the rand and Namibian dollar could have had in an impact in this regard.
The good news is that the data indicates that agriculture has demonstrated two quarters of steady growth - 17% in the second quarter and 11.2% in the first. During the last quarter of 2016, the sector grew at -12.5%.
Mining has also recovered well with growth of 25.8% in the past quarter compared to -19.4% during the same three months in 2016. During the first quarter of 2017, the sector grew at 18.7%.
Other figures included fisheries at -9.8%, manufacturing at 2.9% and the public service at -2.3%.
JO-MARÉ DUDDY
The construction sector has shown negative growth for the sixth consecutive quarter and the retail and wholesale sectors have shown decline in growth for the third consecutive quarter.
In the second quarter of the year the economy grew by -1.7%, according to the latest figures released yesterday by the Namibia Statistics Agency (NSA).
Had there been no revision of growth during the last quarter of 2016, Namibia would have been in recession for its fifth consecutive quarter.
However, in the last quarter of last year, the NSA adjusted its growth rate from -1.4% to 0.3%. At the time, the move raised several eyebrows and Rowland Brown, co-founder of Cirrus Capital, tweeted that the budget had been largely cut during that quarter.
The latest figures indicate that since 2016, Namibia has not shown any growth. The second and third quarters of 2016 indicated growth of -0.4% en -0.3% respectively and the first two quarters of this year recorded growth of -1.7%.
Frans Uusiku, an economist with Simonis Storm, is of the view that even though the growth figures are in the red, the latest numbers indicate a strengthening of the economy.
For construction, growth in the last quarter stood at -51.9%, the worst figure since the sector's decline began in 2016. In the first quarter of 2017, it registered growth of -45% while growth was recorded at -32.2% in the first quarter of 2016.
According to Uusiku, the construction industry will remain in the grips of recession in the short to medium term due to the government's budget cuts.
The decline in the wholesale and retail sectors indicates a lack of business confidence as well as decreased demand, both locally and internationally. Furthermore, consumers remain under pressure, he says.
In the past quarter, this sector grew by -8.2% after it grew at -7.5% and -3% in the first two quarters respectively. In the second quarter of 2016, this sector grew at 10%.
Hotels and restaurants are now in a technical recession as they have shown decline for a second consecutive quarter. The past quarter indicated growth of -3%. In the first three months of the year, the industry grew by -7.3% and in the second quarter of last year, growth of -3.6% was recorded. According to Brown, the strengthening of the rand and Namibian dollar could have had in an impact in this regard.
The good news is that the data indicates that agriculture has demonstrated two quarters of steady growth - 17% in the second quarter and 11.2% in the first. During the last quarter of 2016, the sector grew at -12.5%.
Mining has also recovered well with growth of 25.8% in the past quarter compared to -19.4% during the same three months in 2016. During the first quarter of 2017, the sector grew at 18.7%.
Other figures included fisheries at -9.8%, manufacturing at 2.9% and the public service at -2.3%.
JO-MARÉ DUDDY
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