Thursday, December 12, 2013

Namibia holds rate, revises down 2013 growth forecast

    Namibia's central bank held its repo rate steady at 5.50 percent, saying inflation is expected to remain low for the rest of the year and economic growth is relatively strong though the 2013 forecasts was revised down to around 4 percent from the August forecast of 4.7 percent and 2012's 5.0 percent.
    The Bank of Namibia, which has held rates steady this year, said the downward revision of its forecast was mainly due to weak agriculture from the current drought while construction was estimated to have performed well and wholesale and retail trade saw higher sales due to tax relief and civil service salary re-grading.
    Namibia's Gross Domestic Product expanded by an annual 2.3 percent in the second quarter, up from 1.9 percent in the first quarter.
    Inflation eased to 4.92 percent in October from 5.4 percent in September due to low increases of food and beverage prices while transport and housing rose slightly. The Nambian statistics agency also rebased the consumer price index, resulting in a lower contribution of food and non-alcoholic beverages to the based while alcohol, tobacco, housing, water and electricity increased.
    Namibia's international reserves declined further to 13.2 billion Namibian dollars at the end of the third quarter from July's N$18.1 billion due to higher imports by mining construction "and to a lesser extent luxury goods," the bank said.
    "Nevertheless, the decline in reserve coverage is transitory and reserve levels remain adequate to maintain the fixed currency arrangement and meet other international obligations," the bank said.
    The Namibian dollar is pegged to South Africa's rand and the bank said reserves cover 9.2 weeks of imports.


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