Slight improvement in business climate
The IJG Business Climate Monitor recovered by 0.81 points in March, to a level of 47.04 points, from 46.24 in the preceding month.
Despite the slight recovery, the index remained well below the 50-point level, meaning that the high-frequency indicators still suggest the economy is contracting but at a slightly slower rate than was the case in the preceding month.
“This is the third consecutive contraction in the index, which has indicated a slowing economy since mid-2015, an observation subsequently backed up by the Namibia Statistics Agency's Gross Domestic Product figures,” said the IPPR.
Of the 31 indicators measured, 13 saw expansion in March, while the remaining 18 contracted. During the month, two very noteworthy positive points were witnessed, namely increased diamond and gold production, according to the IPPR.
“It is believed that this trend will be followed by both copper and uranium through 2017,” the IPPR said of the business environment.
But the IPPR was concerned about the outlook for uranium. “However, with regard to uranium, remaining price pressures on the nuclear commodity mean that risks to the production outlook abound,” the IPPR said.
“Additional positives can be seen with regards to beef and lamb prices, both of which have recovered dramatically, signalling a decline in supply to the abattoirs, largely as a result of inventory rebuilding following the end of the drought. This bodes well for agriculture growth in 2017,” the IPPR said.
“Added to this, total import volumes are starting to moderate while exports are slowly improving, meaning that the merchandise trade balance too is improving. This is positive for international reserve levels, which levels are critical for maintaining macro-stability and the currency peg,” it concluded.
STAFF REPORTER
Despite the slight recovery, the index remained well below the 50-point level, meaning that the high-frequency indicators still suggest the economy is contracting but at a slightly slower rate than was the case in the preceding month.
“This is the third consecutive contraction in the index, which has indicated a slowing economy since mid-2015, an observation subsequently backed up by the Namibia Statistics Agency's Gross Domestic Product figures,” said the IPPR.
Of the 31 indicators measured, 13 saw expansion in March, while the remaining 18 contracted. During the month, two very noteworthy positive points were witnessed, namely increased diamond and gold production, according to the IPPR.
“It is believed that this trend will be followed by both copper and uranium through 2017,” the IPPR said of the business environment.
But the IPPR was concerned about the outlook for uranium. “However, with regard to uranium, remaining price pressures on the nuclear commodity mean that risks to the production outlook abound,” the IPPR said.
“Additional positives can be seen with regards to beef and lamb prices, both of which have recovered dramatically, signalling a decline in supply to the abattoirs, largely as a result of inventory rebuilding following the end of the drought. This bodes well for agriculture growth in 2017,” the IPPR said.
“Added to this, total import volumes are starting to moderate while exports are slowly improving, meaning that the merchandise trade balance too is improving. This is positive for international reserve levels, which levels are critical for maintaining macro-stability and the currency peg,” it concluded.
STAFF REPORTER
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