Martin Endjala
The latest Bank of Namibia Quarterly Bulletin for December 2023 reported that annual growth in broad money supply has experienced a moderate increase of 7.9 percent.
This growth has been primarily driven by a significant surge in Net Foreign Assets of the depository corporations. However, during the same period, Private Sector Credit Extension saw a slowdown of 1.6 percent in the third quarter of 2023.
This rise in annual growth during the third quarter of 2023 was fueled by an increase in Net Foreign Assets of the depository corporations, attributed to diamond proceeds and revaluation gains.
On the flip side, the growth in Private Sector Credit Extension decelerated compared to the same period in 2022, mainly due to reduced demand and repayments by businesses.
Money market interest rates remained relatively stable in the quarter under review, as policy rates remained unchanged.
This followed an increase in June 2023, following several previous hikes in the preceding year. Furthermore, there was a notable increase in liquidity levels, influenced by heightened diamond sale proceeds and government payments.
Kazembire Zemburuka, the Director of Strategic Communications and International Relations at the Bank of Namibia, highlighted that the domestic economy sustained positive growth during the third quarter of 2023.
This growth was primarily driven by steady expansion in the primary and tertiary industries. Year-on-year real Gross Domestic Product (GDP) growth reached a robust 7.2 percent in the same quarter.
He also noted that Namibia’s annual inflation rate decreased both on a quarterly and yearly basis during the third quarter of 2023. This decline was largely attributed to a reduction in transport-related inflation.
In particular, inflation decreased to 4.9 percent in the third quarter of 2023, compared to 5.9 percent in the previous quarter.
The slowdown in inflation was primarily driven by reduced inflation in the transport sector, as well as in food and miscellaneous goods and services during the period under review.
On an annual basis, overall inflation decreased by 2.2 percentage points from the 7.1 percent recorded in the third quarter of 2022.
This decline was attributed to significant drops in the inflation rates for transport and furnishings, household equipment, and routine maintenance of homes, hotels, cafes, and restaurants.
Meanwhile, the government debt stock stood at 64.8 percent of Gross Domestic Product at the end of September 2023. This represents a decrease of 2.3 percentage points compared to the previous year.
The decline is primarily due to a more substantial increase in quarterly Gross Domestic Product compared to the rise in Central Government debt. Consequently, Central Government debt rose by 9.7 percent to N$148.8 billion, driven by increased issuance of both Treasury Bills and Internal Registered Stock.
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