Deteriorating global outlook to weigh on exports
N$7.2 billion recorded in August
Diamonds was Namibia's largest export commodity during August 2022, mainly destined to Botswana and UAE.
Namibia’s export earnings averaged N$7.4 billion between January 2022 and August 2022, according to the Namibia Statistics Agency (NSA). During the corresponding period of 2021, export earnings averaged N$7.7 billion.
The value of exports stood at N$7.2 in August 2022, a decline of N$1.1 billion when compared N$8.3 billion recorded in July 2022. In August 2021, exports were recorded at N$5.3.
On the other hand, Namibia’s import bill stood at N$10.1 billion in August 2022, which was mainly driven by petroleum oils valued at N$2.2 billion. This led to Namibia recording a trade deficit of N$2.9 billion, reflecting a 2.1% and 9.8% increased trade deficit when compared to the trade deficits recorded in July 2022 and August 2021.
According to Simonis Storm, year to date, the monthly trade deficit averages N$3.1 billion compared to N$2.2 billion for the same period last year.
“Persistent trade deficits post the pandemic imply that Namibia consumes and invests more than it produces,”Simonis Storm said.
During the month of August 2022, Namibia’s top five export markets were Botswana, South Africa, China, Zambia and the United Arab Emirates (UAE).
Diamonds was Namibia’s largest export commodity during August 2022, accounting for 30.1% of total exports and was mostly destined to Botswana and United Arab Emirates. Fish and uranium came second and third in the list accounting for 11.8% and 7.6% of total exports, respectively. Fish were mostly destined to Spain and Zambia while uranium was mainly destined to China, NSA said.
Outlook
“We expect Namibian exports to be under pressure towards the end of the year. Going forward, a deteriorating global outlook will weigh heavily on Namibia’s export potential. Already, factory orders are declining in some of Namibia’s main export markets, where factory orders have decreased by 8.3% in the US, China (0.6%) and the EU (46.3%) year to date. The latest manufacturing Purchasing Managers Index (PMI) survey data points came in below the critical 50 index point level, which indicates contractions in activity for some of Namibia’s main trading partners,”Simonis Storm said.
The PMI in South Africa- a key trading partner for Namibia – has retreated into contractionary territory, dragged lower by a decrease in local sales orders and export orders, which have declined for four consecutive months. These datapoints signal lower demand for commodities as manufacturing activity could potentially decrease based on the outlook determined by the PMI surveys.
Indeed, while the World Trade Organisation (WTO) increased its global trade growth forecast from 3.0% to 3.5% for 2022, it expects global trade growth to be only 1.0% in 2023. This is a sharp downward revision from its previous forecast of 3.4% for 2023, according to Bloomberg Intelligence. The WTO expects recessions in major economies to weigh on import demand and so merchandise trade will likely “grow next year at a much more subdued pace than previously expected, while poorer nations face food insecurity and debt problems”. Further risks to global trade growth include an escalation of the Russia – Ukraine war and an “under-appreciated risk” of a decoupling of the US and China, Simonis Storm [email protected]
The value of exports stood at N$7.2 in August 2022, a decline of N$1.1 billion when compared N$8.3 billion recorded in July 2022. In August 2021, exports were recorded at N$5.3.
On the other hand, Namibia’s import bill stood at N$10.1 billion in August 2022, which was mainly driven by petroleum oils valued at N$2.2 billion. This led to Namibia recording a trade deficit of N$2.9 billion, reflecting a 2.1% and 9.8% increased trade deficit when compared to the trade deficits recorded in July 2022 and August 2021.
According to Simonis Storm, year to date, the monthly trade deficit averages N$3.1 billion compared to N$2.2 billion for the same period last year.
“Persistent trade deficits post the pandemic imply that Namibia consumes and invests more than it produces,”Simonis Storm said.
During the month of August 2022, Namibia’s top five export markets were Botswana, South Africa, China, Zambia and the United Arab Emirates (UAE).
Diamonds was Namibia’s largest export commodity during August 2022, accounting for 30.1% of total exports and was mostly destined to Botswana and United Arab Emirates. Fish and uranium came second and third in the list accounting for 11.8% and 7.6% of total exports, respectively. Fish were mostly destined to Spain and Zambia while uranium was mainly destined to China, NSA said.
Outlook
“We expect Namibian exports to be under pressure towards the end of the year. Going forward, a deteriorating global outlook will weigh heavily on Namibia’s export potential. Already, factory orders are declining in some of Namibia’s main export markets, where factory orders have decreased by 8.3% in the US, China (0.6%) and the EU (46.3%) year to date. The latest manufacturing Purchasing Managers Index (PMI) survey data points came in below the critical 50 index point level, which indicates contractions in activity for some of Namibia’s main trading partners,”Simonis Storm said.
The PMI in South Africa- a key trading partner for Namibia – has retreated into contractionary territory, dragged lower by a decrease in local sales orders and export orders, which have declined for four consecutive months. These datapoints signal lower demand for commodities as manufacturing activity could potentially decrease based on the outlook determined by the PMI surveys.
Indeed, while the World Trade Organisation (WTO) increased its global trade growth forecast from 3.0% to 3.5% for 2022, it expects global trade growth to be only 1.0% in 2023. This is a sharp downward revision from its previous forecast of 3.4% for 2023, according to Bloomberg Intelligence. The WTO expects recessions in major economies to weigh on import demand and so merchandise trade will likely “grow next year at a much more subdued pace than previously expected, while poorer nations face food insecurity and debt problems”. Further risks to global trade growth include an escalation of the Russia – Ukraine war and an “under-appreciated risk” of a decoupling of the US and China, Simonis Storm [email protected]
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