IMF slashes growth outlook for Nam
The IMF’s outlook for the domestic economy for this year and the next has worsened significantly.
Jo-Maré Duddy – The International Monetary Fund (IMF) has slashed its economic growth forecast for Namibia for 2019 from 1.4% in April this year to -0.2%.
In October last year, the IMF still expected domestic growth of 3.1% for 2019.
The IMF’s forecast is a lot rosier than that of the Bank of Namibia (BoN), whose latest outlook predicts -1.7%. Fitch Ratings expects -1.2%.
The IMF this week also lowered its growth forecast for Namibia for 2020. In April, the Fund’s projection was 2.0%; now it stands at 1.6%. The IMF expects growth of 3.6% for Sub-Saharan Africa (SSA) next year.
For this year, the region’s growth is forecast at 3.2%.
Of Namibia’s neighours, only Angola and Zimbabwe is expected to register negative growth in 2019. The IMF’s current forecast for Angola is -0.3%, while that of Zimbabwe stands at -7.1%.
Botswana is expected to grow 3.5% and Zambia 2.0%. Economic growth for South Africa for 2019 is projected at 0.7%.
Africa and debt
The IMF also released its Global Financial Stability Report this week, warning that rising debt levels in Africa pose an increasing risk to the region's economies, especially with increasing borrowing from China.
China's lending to developing countries, especially those that produce key natural resources, has been a rising source of concern among economists and policymakers, like World Bank president David Malpass who has called for more transparency on the amounts and conditions.
The IMF analysis shows "more than a dozen countries that are either in distress or at high risk of debt distress," said Evan Papageorgiou, of the IMF's Monetary and Capital Markets Department.
"In a lot of low-income countries, particularly a lot of Sub-Saharan African countries, the issue of debt is becoming more and more pressing," he told reporters.
China
The IMF report again flags concerns about high levels of borrowing from China, which is not part of the Paris Club of creditors, which have common terms on how to handle countries that get into trouble.
"Non-Paris Club creditors, including China, have become the dominant source of official bilateral credit for many low-income developing countries," the report said.
Those creditors "should consider the benefits of adopting sustainable lending rules."
This also is a concern because many of those loans do not show up in government budgets because they go to state-owned enterprises, and therefore are not accounted for in the country's debt statistics, the IMF said.
Tobias Adrian, head of IMF Monetary and Capital Markets Department, said capital flows to Africa are important means of financing development but have to be "dealt with in a responsible manner." – Additional reporting by Nampa/AFP
In October last year, the IMF still expected domestic growth of 3.1% for 2019.
The IMF’s forecast is a lot rosier than that of the Bank of Namibia (BoN), whose latest outlook predicts -1.7%. Fitch Ratings expects -1.2%.
The IMF this week also lowered its growth forecast for Namibia for 2020. In April, the Fund’s projection was 2.0%; now it stands at 1.6%. The IMF expects growth of 3.6% for Sub-Saharan Africa (SSA) next year.
For this year, the region’s growth is forecast at 3.2%.
Of Namibia’s neighours, only Angola and Zimbabwe is expected to register negative growth in 2019. The IMF’s current forecast for Angola is -0.3%, while that of Zimbabwe stands at -7.1%.
Botswana is expected to grow 3.5% and Zambia 2.0%. Economic growth for South Africa for 2019 is projected at 0.7%.
Africa and debt
The IMF also released its Global Financial Stability Report this week, warning that rising debt levels in Africa pose an increasing risk to the region's economies, especially with increasing borrowing from China.
China's lending to developing countries, especially those that produce key natural resources, has been a rising source of concern among economists and policymakers, like World Bank president David Malpass who has called for more transparency on the amounts and conditions.
The IMF analysis shows "more than a dozen countries that are either in distress or at high risk of debt distress," said Evan Papageorgiou, of the IMF's Monetary and Capital Markets Department.
"In a lot of low-income countries, particularly a lot of Sub-Saharan African countries, the issue of debt is becoming more and more pressing," he told reporters.
China
The IMF report again flags concerns about high levels of borrowing from China, which is not part of the Paris Club of creditors, which have common terms on how to handle countries that get into trouble.
"Non-Paris Club creditors, including China, have become the dominant source of official bilateral credit for many low-income developing countries," the report said.
Those creditors "should consider the benefits of adopting sustainable lending rules."
This also is a concern because many of those loans do not show up in government budgets because they go to state-owned enterprises, and therefore are not accounted for in the country's debt statistics, the IMF said.
Tobias Adrian, head of IMF Monetary and Capital Markets Department, said capital flows to Africa are important means of financing development but have to be "dealt with in a responsible manner." – Additional reporting by Nampa/AFP
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