For the Namibian economy to recover from the rut it is currently in, financial discipline needs to be exercised, according to an analyst.

Namibia is stuck in structural problems such as high youth unemployment, shrinking private sector, over-regulation of many industries, excessive increase in overall debt and lack of skills that is a drag on economic growth and widening the income distribution, Indileni Nanghonga, an expert from an investment research firm, Simonis Storm Securities (SSS), said on Thursday in an outlook of Namibia in 2018 report.

“We only foresee a turn-around once Government takes a firm stand on fiscal consolidation and policies that are pro-growth. We believe that fiscal discipline need to be exercised,” he said.

According to Nanghonga the research team revised the Gross Domestic Product (GDP) for 2017 to -0.3 percent from 0.5 percent previously estimated and project GDP at 2.2 percent and 2.4 percent in 2018 and 2019, respectively.

“Our downward revision was prompted by a continuous slowdown in the construction sector,” he added.

In terms of other growth sectors, he said due to expected better rainfall in 2018, agriculture is set to improve going forward and growth is also expected from the mining and manufacturing sector coupled with a growing tourism industry.

He said that the construction sector will remain a drag on GDP as government reduced the budget for capital expenditure.

According to the IMF, the global upswing in economic activity is strengthening, with global growth projected to rise to 3.6 percent in 2017 and 3.7 percent in 2018. But the recovery is not complete as growth remains weak in many countries, and inflation is below target in most advanced economies. Enditem

Source: Xinhua/



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