WINDHOEK – Namibia’s economy performed dismally during the first quarter of this year – the period until end of March – a result of a “continuously fragile global economic recovery”, according to Bank of Namibia.
Agricultural production was “frail”, mining displayed “mixed performance”, beverage production and construction “declined”, while wholesale, retail and tourism posted “poor performance”, the central bank said.
According to the Bank of Namibia, in the agricultural sector, the number of cattle marketed and milk production declined.
The production of zinc and diamonds declined with the exception of uranium and gold production. In the construction sector, the value of buildings completed declined.
The central bank also noted an increase in average annual inflation to 7 percent which is higher than the previous quarter figure of 6,4 percent.
The rise in annual inflation was mostly attributed to higher inflation rates for food and alcoholic beverages and transport.
A contraction in net foreign assets led to a contraction in money supply with credit extension to the private sector increasing in real terms. Government’s outstanding debt rose both on a quarterly and annual basis at the end of the last quarter.
Overall, the domestic economy continued to grow at a slow pace during the first quarter of this year in line with global economic developments.
Risk to the outlook remains on the downside, mainly due to the depressed global demand resultant from high unemployment rates, the European debt crisis and inflationary pressure emanating from rising international food and crude oil prices.
“This may result in reduced demand for commodities, thus diminishing the country’s export earnings,” central bank said.