Namibia recorded robust real GDP growth, falling inflation, a strong external current account surplus, and continued low external indebtedness over the last two years, according to an IMF report.
Real GDP grew by 6 percent in 2004, as new marine technologies prompted a surge in diamond production and most other sectors of the economy showed solid economic activity, aided by a decline in interest rates.
Growth slowed in 2005, as diamond production fell relative to the high production base of the previous year and growth rates in other sectors moderated somewhat.
The appreciation of the currency throughout much of 2004-05 hurt the fishing and commercial agriculture industries in particular, while higher oil prices affected the transportation sector.
Inflation moderated in 2004-5, due to good rains and the strengthening Namibia dollar, which appreciated in tandem with the South African rand to which it is pegged. Average inflation fell to 4¼ percent in 2004 and only 2¼ percent for January-November 2005.
Namibia's external current account remained solidly in surplus, peaking at more than 10 percent of GDP in 2004.
Surging diamond exports and buoyant customs union (SACU) receipts, which increased by one-third in 2004, more than offset a large increase in imports, including oil imports.
Directors commended the authorities for overall prudent macroeconomic policies, which had contributed to the recent strong economic performance, with robust growth, declining inflation, a large current account surplus, and continued low external and public indebtedness.
For more details visit: IMF website.
International Monetary Fund
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