| Government borrowing declines in first quarter |
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| Written by Staff Reporters | |
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Government borrowing declined by 18.9% quarter-on-quarter during the first three months of 2008, a turnaround from increases of 0.8% and 12%, respectively, registered at the end of the preceding quarter and the corresponding quarter of 2007, the Bank of Namibia said in its First Quarter Bulletin released this week
The bank said the decline in government borrowing was a
result of Namibia’s favourable fiscal position. The total debt of the
Central Government increased marginally to N$11.9 billion at the end of
the fourth quarter of the 2007/08 fiscal year mainly due to the
depreciation of the Namibia Dollar against major international
currencies. The increase in total debt resulted in a debt position of
22.1% of the GDP. The overall balance of payments registered a surplus
of N$2.3 billion during the first quarter of 2008, mainly attributable
to strong SACU revenue inflows and a narrowing capital and financial
account deficit, the bank said.
Annual inflation rose from a quarterly average of 6.9% during the fourth quarter of 2007 to 8% in the first quarter of 2008. It increased further to 9.7% during May 2008, the highest rate recorded since April 2003. “This persistent decline in Government borrowing was a result of Namibia’s favourable fiscal position,” the bank said. The bank said it remained committed to the currency peg on the Rand as the nominal anchor for price expectations and said there were no eminent threats to the sustenance of the peg. “In fact, supported by prudent fiscal policy and robust export performance, the reserves outlook of the country remains favourable and current reserves stand at N$8.9 billion, seven times more than what is required to support the peg,” the bank said. Last month, the bank decided to keep its bank rate unchanged at 10.50% for the fourth consecutive time. The last time it raised the rate was in October 2007, when it went up by 50 basis points from 10%. |
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