Namibia plunges deeper into recession

THE Namibian economy experienced its second worst quarter on record during the first three months of 2009, with economic growth hitting minus 5,8 per cent.


This seasonally adjusted annualised figure released by the Central Bureau of Statistics (CBS) on Monday night is the latest in a string of negative growth percentages showing Namibias spiral into recession over the past year.

According to the CBSs latest preliminary gross domestic product (GDP) figures, economic growth recorded in the second quarter last year was minus 3,9 per cent, followed by minus 4,1 per cent in the third quarter.

The economy recovered slightly in the fourth quarter, growing by 1,1 per cent, before plunging back into negative territory during the first quarter this year.

The last time Namibia experience such gloomy quarterly growth on seasonally adjusted annualised basis was in the fourth quarter of 2004, when growth reach minus 8,3 per cent, Reinhold Kamati of the CBS told The Namibian.

The latest CBS stats show that the pillars of the economy: fishing, mining and quarrying, manufacturing and tourism, all suffered massive contractions during the first quarter of 2009.

As expected, the diamond crisis resulted in mining and quarrying being affected the worst. Growth in this sector was minus 65,6 per cent.

For the third consecutive quarter, manufacturing shrunk drastically. Growth during the first quarter of 2009 was minus 39,5 per cent, while in the second and third quarters of last year it stood as minus 52,3 per cent and 28,3 per cent respectively.

Fishing recorded its fourth consecutive quarter of negative growth, with first-quarter growth at minus 33,5 per cent. Growth during the previous three quarters was minus 56,6 per cent in December, minus 16,9 per cent in September and minus 5,8 per cent in March.

Hotels and restaurants, regarded as an indicator for tourism, remained in negative territory for the third consecutive quarter, with growth from January to March this year at minus 17,1 per cent. During the second and third quarter of 2008, growth reached minus 22,7 per cent and minus 24,9 per cent respectively.

GDP growth at market prices stood at minus 12,4 per cent, compared to minus 2,5 per cent in the fourth quarter last year.

Old Mutual Namibia Group Economist Robin Sherbourne yesterday said the CBS numbers are broadly in line with our view of what is going on in the economy.

Sherbourne, who had warned of a recession in April already, has lowered his economic growth prediction for 2009 from minus 1,6 per cent to minus 2,2 per cent.

We have not detected evidence of any sector outside uranium mining growing enough to outweigh what we know for certain is happening in diamond and copper mining, Sherbourne said.

The Bank of Namibia (BoN) has also adjusted its growth forecast for the year from 1,1 per cent in February to 0,4 per cent in April, and to minus 0,6 per cent recently.

Deputy Finance Minister Tjekero Tweya assured Parliamentarians earlier this month that Government will keep the economy afloat.

We will avoid a full-blown recession, even though we are in recession, he told the National Assembly.

The Namibian

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