Namibia Central Bank Governor Sees Slower GDP Growth at 4.3%

  • Inflation set to remain below 10% for some time, Shiimi says
  • Central bank to make next interest-rate decision in February

Namibia central bank Governor Ipumbu Shiimi said economic growth will probably slow to 4.3 percent this year while inflation will remain subdued.

The growth estimate is still “respectable,” given a severe drought and a slide in demand for commodities from China, Shiimi said in an interview in the capital, Windhoek, late on Jan. 21. The bank forecast the economy expanded 5.4 percent last year.

“The main risks include a reversal of growth in advanced countries, a more-than-expected decline in China’s economy, worsening conditions in other emerging-market countries, weaker growth in South Africa and Angola and drought at home,” he said.

The nation posted economic growth of 3.5 percent in the third quarter from 3.2 percent a year earlier, according to the Namibia Statistics Agency.

Namibia is the world’s largest producer of offshore diamonds and is also a miner of uranium. Its currency is pegged to the South African rand, which has plunged 17 percent against the dollar in the past three months.

While the Bank of Namibia generally follows monetary policy set by its bigger neighbor, it diverged last year. Shiimi has kept the benchmark rate unchanged at 6.5 percent since June, while the South African Reserve Bank has raised its key rate twice to 6.25 percent in the same period.

Inflation in Namibia, which accelerated to 3.7 percent in December, is set to remain below 10 percent for some time, Shiimi said.

“We are comfortable with a rate of less than 10 percent,” he said. The central bank is scheduled to announce its next rate decision in February.

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