WINDHOEK (Reuters) – Namibia has cut its 2017 economic growth forecast after slipping into a technical recession in the second quarter, Finance Minister Calle Schlettwein said on Wednesday.
The economy is now expected to grow by between 1.8 percent and 2.3 percent in 2017, down from an initial estimate of 2.5 percent, Schlettwein told a news conference.
The statistics agency said last week the economy had shrunk by 1.7 percent in the second quarter, the same contraction as in the first quarter.
Schlettwein said the projected 2017 growth would be led by a recovery in agriculture after a drought last year and an expansion in the mining sector.
“The recovery in mining and agriculture would support potential growth in primary industries, with corresponding improvements in beneficiation and manufacturing activity, given the strong sectoral linkages,” Schlettwein said.
Growth in mining is mainly a result of increased production of uranium following the commissioning of the Husab Mine, expected to become the second biggest uranium mine in the world.
Schlettwein said a decision by the Bank of Namibia to cut interest rates by 25 basis points to 6.75 percent would support domestic demand conditions in the medium-term.
Namibia’s economy grew by 1.1 percent in 2016, slumping from a more than 5 percent expansion a year earlier due to deep contractions in construction, uranium and diamond industries.
Reporting by Nyasha Nyaungwa; editing by Andrew Roche