The IPPR said the recently tabled budget offers little help as it focuses on correcting past imbalances on expenditure rather than acting as a stimulus for economic growth. However, a pick up in mining production, combined with a weaker exchange rate, should place the economy on a moderate growth path, the institute added. Estimates from the Organisation for Economic Cooperation and Development (OECD) indicate that most major world economies are set to experience a downturn this year, with a combined projected growth rate of 2.3%, down from 2.7% in 2007 for the OECD group of countries.
Locally, the IPPR said a recent hike in electricity prices and current high fuel costs should see inflation increasing further, thereby inducing tighter monetary policy resulting in a slowdown in consumer spending and the consequent low economic growth.
On agriculture, the IPPR said the drought experienced last year and the subsequent late rains during the current rain season are likely to put a damper on the growth prospects of the grain-producing sub-sector.
“The floods will place limitations on the number of livestock being marketed in the northern regions, where there has been significant growth in livestock marketing (cattle mainly) in the past few years. On the positive side, a last minute signing of the preliminary Economic Partnership Agreement, thus allowing Namibian products, and beef in particular, to be exported to the European Union (EU) should provide relief to the sector,” it said.