THE Bank of Namibia (BoN) says the Namibian economy is expected to contract by 6.9% in 2020 following a mild contraction of 1.1% in 2019.
The deep contraction estimated for 2020 is attributed to the COVID-19 pandemic, which had led to travel restrictions and a lockdown in Namibia and globally.
This was revealed in the central bank’s Economic Outlook report for April 2020.
Director of communications and financial development at BoN, Emma Haiyambo, stated that risks to domestic growth are currently dominated by uncertainty regarding the expected duration and final impact of COVID-19 on the economy.
“Risks to domestic growth are dominated by ongoing travel restrictions, causing disruptions to supply. Other risks to domestic growth and outlook include the volatile and persistently low international prices of some of Namibia’s export commodities,” Haiyambo stated.
According to the International Monetary Fund’s (IMFs) World Economic Outlook (WEO) for April 2020, the global economy is expected to contract substantially in 2020 before recovering in 2021.
It is projected that the world economy will contract by 3.0% in 2020, which is a sharp reversal from a positive growth rate of 3.3% published in the WEO update for January 2020.
The downward revision to 2020 growth is largely attributed to anticipated lower industrial production and volatile commodity markets, primarily due to the worsened impact of the COVID-19 outbreak.
Global output, however, is projected to expand by 5.8 % in 2021.
BoN further stated that that there is risks of countries experiencing a re-emergence of infections once efforts at containment are relaxed.
Another risk to global growth is associated with the volatility of international commodity prices.