Nam to grow 1.2% in 2018

The International Monetary Fund (IMF) expects the Namibian economy to grow by 1.2% this year, below the average of 3.4% it projects for Sub-Saharan Africa.In its latest World Economic Outlook, released Tuesday, the IMF predicts domestic growth of 3.3% and 3.5% in 2019 and 2020 respectively. Both these years’ growth is expected to be below the regional average of 3.7% and 4%.The IMF’s growth expectation for 2018 is the same as the figure quoted by finance minister Calle Schlettwein in his recent budget speech.According to the IMF’s forecast, Namibia’s current account balance this year will be -3.6% of gross domestic product (GDP), compared to a regional average of -2.9%. In 2017, Namibia current account balance was -1.4% of GDP, according to the IMF. In 2019 and 2020, a figure of -5.1% and -8.3% respectively is expected.The IMF predicts an average inflation rate of 5.8% for Namibia in 2018.WorldThe global economy is expected to grow at a solid pace through next year, boosted by faster expansion in the United States and Europe, but after that risks will build, the IMF said.The Fund still predicts world growth of 3.9% in 2018 and 2019, unchanged from January despite raised estimates for US and EU growth.That is an improvement on the 3.8 percent global growth seen last year.However, the IMF cautions that the growth "momentum is not assured," given trade tensions between the United States and China and the expected reversal of the positive effects from the US tax cuts.IMF Chief Economist Maurice Obstfeld stressed that the trade conflict could damage the global economy if it broadens to affect other countries, and said even the prospect of a trade war could do harm."There's not going to be any winners coming out of a trade war," he told reporters, noting that the uncertainty alone could put a damper on investment.While it is difficult to predict how things will play out, "I suspect if you keep poking at economic expansion it could turn around and bite you," Obstfeld warned.The report notes that the sweeping US tax cuts approved in December will fuel higher growth only through next year, and after that will "subtract momentum."The IMF raised its US forecast by two tenths for both years, to 2.9% for 2018 and 2.7% for 2019, which follows big upward revisions in the October report, due to the tax impact.However, Obstfeld warned the stimulus was "largely temporary."And because the US boost accounts for most of the higher world expansion, beyond 2019 "global growth is projected to gradually decline to 3.7% by the end of the forecast horizon," the report said.RisksThe risks to the global economic outlook "clearly lean to the downside" beyond the next few quarters, the IMF warns.Like other advanced economies, the United States will max out growth and return to a more sluggish pace, "held back by aging populations and lackluster productivity."And despite the fact increasing world trade helped boost growth in recent years, there has been a rise in public skepticism about the benefits, leading to a renegotiation of trade deals and increasing friction.US President Donald Trump last month imposed steep tariffs on steel and aluminum imports and threatened to impose more on tens of billions of Chinese goods, prompting Beijing to slap duties on US goods like pork and sorghum and threaten even more sensitive US exports like soy."That major economies are flirting with trade war at a time of widespread economic expansion may seem paradoxical – especially when the expansion is so reliant on investment and trade," Obstfeld said."Our strong message at this meeting is there is a multilateral system. Let's use it and proceed in a collaborative way rather than conflictive way."ProjectionsIn other projections, the IMF upgraded the forecast for the euro area to 2.4% for 2018, an upward revision of two tenths compared to the January estimate, as it raised its estimates for key members, especially Spain. But the forecast for 2019 was unchanged at 2%.Japan's growth is still seen at a sluggish 1.2% this year, after a rare and large upgrade of five tenths in January, slowing to 0.9% in 2019.The forecasts for China and India, key drivers of global growth, were unchanged from January. China is expected to expand 6.6% and 6.4% this year and next, while India should grow 7.4% and 7.8%. – Own report and Nampa/AFP

Nam to grow 1.2% in 2018

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