Namibia’s weak domestic import demand and increasing uranium exports are expected to narrow the country’s current account deficit over the coming quarters, Fitch Solutions Macro Research said in a report.
The deficit is expected to continue to narrow over the short term, from an estimated 5.4 percent of GDP in 2018 to 3.5 percent in 2019 and 3.3 percent in 2020, the research firm said in the October Africa Monitor report released on Wednesday.
We forecast real GDP growth will slide further into negative territory in 2019, before picking up modestly to 0.3 percent in 2020,” the report added.
According to the research firm, dim growth prospects for most sectors of the economy will dampen household incomes and spending power, weakening demand for consumer goods imports.
“Moreover, while capital spending is projected to increase by 42.2 percent in FY2019/20 budget statement, we believe that a much lower portion of the proposed 7.9 billion Namibia dollars (520 million U.S. dollars) will be spent productively given increasingly lower development budget execution rates,” the report added.
Meanwhile, the report said increasing uranium production is set to offer tailwinds to Namibian exports.
“A ramp-up in uranium production will see exports of the radioactive metal tick up,” the research firm added.
Despite previous project delays, the firm expects the key Husab uranium mine to approach capacity in 2020 and forecasts robust uranium output growth of 40 percent in 2019 and 10 percent in 2020. Enditem