Namibia 'hit by global slowdown'

Namibia's economy has been hit by the global economic slowdown, the International Monetary Fund has said.

The IMF said that GDP growth in the south-west African state dropped to about 3% last year from 4.1% in 2007.

It also called on the country to expand growth in non-mineral sectors, to help ease poverty.

And it said sustained further efforts were needed to address the high unemployment and HIV/AIDS challenges in the country.

However, the IMF said that pegging its exchange rate to the South African rand had served Namibia well, but added that such a move had left it constrained when it came to potential interest rate cuts.

"While the Bank of Namibia has found some room to deviate from the interest rate policy of the South African Reserve Bank, (IMF) directors considered that the peg and close financial links with South Africa are likely to constrain the scope for effective independent monetary policy," it said.

The IMF also said Namibian government spending should be of a high quality while budget management ought to be strengthened.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/8001613.stm

Published: 2009/04/16 08:55:02 GMT