Low demand for credit

The Bank of Namibia says there was a lower demand for credit in the third quarter of the year.

According to the Quarterly Bulletin for Private Sector Credit Extension (PSCE), credit extension slowed due to lower demand and business repayments.

Central bank spokesperson Kazembire Zemburuka says the economy grew by 7,2% in the quarter under review, because of activities like mining and selling livestock.

However, some industries, such as construction, didn’t do so well.

“The primary and tertiary industries drove this growth, with the mining sector and livestock marketing contributing significantly.

“However, the secondary industry displayed mixed performance, with variations in manufacturing subsectors.

Construction, after an initial improvement, contracted in the second and third quarters,” Zemburuka says.

He says Namibia’s central government debt rose to 64,8% of gross domestic product (GDP) by the end of September.

“The increase was driven by the higher issuance of treasury bills and internal registered stock, along with external debt disbursements.

“However, government loan guarantees declined to 3,9% of GDP, owing to repayments of foreign loans,” Zemburuka says.

He says the external sector experienced a widened current account deficit of N$11,9 billion in the third quarter of 2023, attributed to higher import growth compared to exports and increased outflows on the services account.

“Despite this, international reserves moderately increased, standing at N$53,8 billion, equivalent to 4,7 months of goods and services imports,” he says.

WORLD VIEW

In the third quarter of 2023, the world economy showed a mix of good and not-so-good signs.

While some countries like the United States (US) and Russia saw their economies grow, others, like those in Europe and Japan, faced challenges.

“Different places are dealing with economic ups and downs. The US and Russia are doing well, but places like Europe, Japan, and China are having a tougher time,” says Zemburuka.

The US economy got a boost from people spending more, investing in homes and government spending.

Russia’s economy grew because of higher oil prices and more money from energy.

However, the United Kingdom’s economy stayed the same, reflecting people spending less due to higher interest rates and strikes.

Looking forward, the world’s overall economic growth is expected to slow down in 2023 and 2024 because of high interest rates and the long-lasting effects of the pandemic.

During the third quarter of 2023, countries’ central banks made decisions to control rising prices.

Some countries, like the US and UK, increased their interest rates to keep prices from going up too fast.

Others, like Brazil and China, lowered their interest rates.

Japan, India, and South Africa kept their rates the same.

“Central banks are trying to find the right balance between keeping prices stable and making sure the economy keeps growing,” Zemburuka says.

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