WINDHOEK (Reuters) -Namibia now expects economic growth of 3.3% this year, down from the 4.5% estimate given when the main budget was presented in March because of a projected contraction in its manufacturing sector, its finance minister said on Tuesday.
In a mid-year budget review, Ericah Shafudah said so far this year manufacturing activity had been weighed down by lower diamond processing, as well as reduced cement and blister copper production.
The outlook for the Southern African country’s primary sector is more positive, with growth of 2.5% seen this year compared to last year’s 1.8% growth, supported by increased mining of uranium and other minerals.
Average growth for the next three fiscal years is seen at 3.6%, down from 4.3% previously, Shafudah added.
She also pointed to a deterioration in the trajectory of public finances.
Namibia’s budget deficit last fiscal year widened to 4.0% of gross domestic product, compared to a deficit of 2.0% of GDP a year before.
“If left unattended (the worsening trend) is highly undesirable and will lead to serious deterioration of key fiscal anchors such as the debt-to-GDP ratio,” Shafudah said.
Namibia’s central bank last week cut its main lending rate by 25 basis points to 6.50% to try to stimulate the sluggish economy.
($1 = 17.3070 Namibian dollars)
(Reporting by Nyasha Nyaungwa; Writing by Sfundo Parakozov; Editing by Alexander Winning and Chris Reese)
