Nam Economic Recovery Disappoints, Says BoN

Jo-Maré Duddy

28 April 2011

Although the Namibian economy is faring “satisfactorily”, it is not doing as well as expected, the Bank of Namibia (BoN) said yesterday.

Keeping its repo rate unchanged at six per cent, the central bank said recovery faced challenges. “Of particular significance is the rising inflationary pressures that have started to build up,” BoN Deputy Governor Paul Hartmann said.

Annual inflation quickened from 3,1 per cent in February to 3,8 per cent in March.

A change in the [interest rate] stance at this stage would run the risk of unduly depressing domestic demand at a time when this demand is not the cause of recent inflation acceleration,” Hartmann said.

He said the favourable speed of global economic recovery seen at the beginning of the year continued, “but [it] somehow lost momentum and gave a frail picture of the global recovery”.

“This outturn occurred against the backdrop of the unemployment rate remaining high and [the] persistent risk of economic overheating, particularly in the emerging market economies,” Hartmann said.

He said the domestic economy continued to improved, “albeit at a slow pace”. Most of the primary, secondary and tertiary sectors performed well, he said.

“The domestic economy, although performing satisfactorily, fell below the expectations created at the beginning of the year,” Hartmann said.

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