By Klaus Schade 29 September 2011 at Hanns Seidel Foundation - - PowerPoint PPT Presentation

▶

Mar 07, 2024 36 likes •278 views

By Klaus Schade 29 September 2011 at Hanns Seidel Foundation Institute for Public Policy Research GDP growth - global 9.6 9.5 10 8.4 8.4 9 8.2 7.8 8 7 5.5 6 5.2 4.4 4.4 5 5 4.0 4.0 2011 (Jan11) 2011 (Jan11) 4 3.0 2011

SLIDE 1

By Klaus Schade 29 September 2011 at Hanns Seidel Foundation

Institute for Public Policy Research

SLIDE 2

GDP growth - global

4.4 5.5 8.4 9.6 8.4 4.0 5.2 8.2 9.5 7.8 5 6 7 8 9 10 2011 (Jan11)

29/09/2011 economist@ippr.org.na 2

4.4 1.5 3.0 4.0 1.6 1.5 1 2 3 4 5 2011 (Jan11) 2011 (Apr11) 2011 (Jun11) 2011 (Sep11)

SLIDE 3

Commodity price trends - gold

1,500 1,600 1,700 1,800 1,900 2,000

29/09/2011 economist@ippr.org.na 3

1,000 1,100 1,200 1,300 1,400 1,500

SLIDE 4

Gold price tends

Gold price increased by 29 per cent since January 2011 Safe haven in times of economic uncertainties High demand growth in India and China (growing

middle-class) – 38 and 25 per cent respectively Central banks increased their stock

Central banks increased their stock Continuation of strong performance expected Benefited South African economy, contributed to

strong ZAR

29/09/2011 economist@ippr.org.na 4

SLIDE 5

Commodity price trends – copper and zinc

2,200 2,300 2,400 2,500 2,600 9,000 9,500 10,000 10,500 Zinc Copper Copper Zinc

29/09/2011 5 economist@ippr.org.na

1,800 1,900 2,000 2,100 2,200 7,000 7,500 8,000 8,500

SLIDE 6

Copper and zinc price trends

Shed value by 22.9 and 22.8 per cent respectively since

1 Aug 2011

Volatile price fluctuations influenced by investor

sentiments rather than by demand – particularly in the case of copper case of copper

Bleak economic prospects point at lower price levels

for remainder of 2011

29/09/2011 economist@ippr.org.na 6

SLIDE 7

Commodity price trends - uranium

55 60 65 70 75

29/09/2011 economist@ippr.org.na 7

40 45 50 55

SLIDE 8

Uranium price trends

Prices took a dive after the Fukushima accident – down

by 16 per cent compared to Jan 2011

Recently prices are recovering but not yet back to price

levels seen at the beginning of 2011 of above USD70 per pound pound

Despite Fukushima accident, nuclear power industry

remains confident about future prospects owing to increasing pressure to curb carbon dioxide emissions

29/09/2011 economist@ippr.org.na 8

SLIDE 9

Commodity price trends - oil

8.5 9 9.5 10 100 110 120 130 NAD USD Oil - USD Diesel - NAD

29/09/2011 economist@ippr.org.na 9

7 7.5 8 8.5 60 70 80 90

SLIDE 10

Oil price trends

Oil prices increased by 14 per cent since January 2011 and

local diesel prices by 24 per cent

Highly influenced by economic prospects and geopolitical

events

The spread of the Arab spring to oil-producing countries

resulted in prices exceeding USD120 per barrel during the resulted in prices exceeding USD120 per barrel during the 2Q2011

Unrest in Libya, accounting for 2 per cent of OPEC output,

in particular contributed to price increases, although Saudi Arabia stepped in

Expectations of resumption of oil production in Libya and

expected lower global demand has resulted in lower prices

Domestic prices for petrol and diesel expected to rise in

October owing to currency depreciation.

29/09/2011 economist@ippr.org.na 10

SLIDE 11

Crop price trends – wheat and maize

2,500 3,000 3,500 White maize Wheat

29/09/2011 economist@ippr.org.na 11

1,000 1,500 2,000

SLIDE 12

Wheat and maize prices

Prices for white maize increased by a whopping 69 per cent since

Jan. 2011 compared to 4 per cent increase in wheat prices

Influenced by climatic conditions and demand Larger than expected area planted in USA for maize but drought

put doubts about larger harvest. In Europe bigger harvest expected despite prolonged drought at beginning of planting expected despite prolonged drought at beginning of planting season.

Russia lifted ban on 1 July 2011 on wheat exports that was put in

place last year after devastating drought and field fires. However, droughts in in USA and Australia contributed to modest price

rises. In addition, farmers use wheat as feed for livestock due to

high corn prices.

High international food prices trickling down to Namibia

resulting in food price inflation exceeding average inflation rate.

29/09/2011 economist@ippr.org.na 12

SLIDE 13

Exchange rate trends

10 11 12 13 14 NAD per US$ NAD per GBP NAD per Euro

29/09/2011 economist@ippr.org.na 13

6 7 8 9

SLIDE 14

Exchange rate trends

Namibia dollar lost 20.0, 20.5 and 21.5 per cent against the

USD, GBP and Euro respectively since Jan. 2011, to a large extent during Sep. 2011

Investor sentiments turned against emerging markets

wing to global economic uncertainties

Lower commodity prices reduces demand for local

currency, in particular gold prices

Weaker Namibia dollar will promote non-traditional

exports and make the country more competitive as tourist destination

...but will increase prices for imports in particular oil ...which will benefit revenue from custom duties (SACU)

29/09/2011 economist@ippr.org.na 14

SLIDE 15

Inflation

8 10 12 14 Namibia RSA

29/09/2011 economist@ippr.org.na 15

2 4 6 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11

SLIDE 16

Inflation – selected categories

10 12 Housing, water, electricity, gas and other fuels Alcoholic beverages and tobacco Health Food and non-alcoholic beverages Transport Overall inflation 29/09/2011 economist@ippr.org.na 16 2 4 6 8 January February March April May June July August

SLIDE 17

Inflation – some highlights

Housing, water, electricity, gas and other fuels consistently

high price increases, in particular sub-categories of ‘rent’ and ‘water, sewerage, waste removal’

Electricity prices adjusted with effect of 1 Sep by 13.1 per cent

will result in inflation of housing etc. increasing by 2.7 percentage points to 10.8 per cent.

Rising global food prices showing impact on domestic food

inflation

Despite stable fuel prices over past three months, transport

inflation is on the increase. Expected to pick up owing to currency depreciation.

Inflation rate of on average 5 per cent expected for 2011, but

moving beyond 6 per cent during last quarter of the year.

29/09/2011 economist@ippr.org.na 17

SLIDE 18

Interest rates

6 8 10 12 Namibia RSA

29/09/2011 economist@ippr.org.na 18

2 4 6 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11

SLIDE 19

GDP growth - Namibia

10.0 15.0 20.0 25.0 Primary industries Secondary industries Tertiary industries GDP at market prices 29/09/2011 economist@ippr.org.na 19

25.0
20.0
15.0
10.0
5.0

0.0 5.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

SLIDE 20

GDP growth 2010 – some details

Higher than expected growth in 2010 supported by

strong recovery of the mining sector (+24.6 per cent)

Diamond mining grew by 34.9 per cent Other mining activities grew by 0.9 per cent

...and the manufacturing sector (+9.1 per cent) ...and the manufacturing sector (+9.1 per cent)

Other manufacturing 21.4 per cent (incl. mineral

beneficiation)

...as well as construction (10.8 per cent) and wholesale

and retail trade (7.9 per cent)

Despite good rainy season crop production declined by

0.2 per cent, while output of the fisheries sector fell by 5.2 per cent

29/09/2011 economist@ippr.org.na 20

SLIDE 21

What to expect for 2011?

Rather stagnant output of diamonds and uranium owing

amongst others to production interruptions due to strong rainfall and recently strikes

Slight improvement expected in tourism (arrivals at HKIA

slightly up)

Ohorongo cement and resumption of copper mining at Ohorongo cement and resumption of copper mining at

Matchless and Otjihase mines will support economic growth

Government’s TIPEEG coming off slowly (as expected),

hence not much impact on growth this year

Prevailing global uncertainties expected to depress

commodity demand

GDP growth in the range of 4 per cent

29/09/2011 economist@ippr.org.na 21

SLIDE 22

Social impact

A number of jobs created, but since economic growth

driven by capital-intensive mining sector, new jobs are not sufficient to change unemployment situation – could change once TIPEEG has reached momentum

Due to persisting unemployment and lack of access to Due to persisting unemployment and lack of access to

productive assets and despite government’s social grants, poverty remains high – as indicated by number

f people in need for food assistance

Consequently income distribution remains highly

skewed

29/09/2011 economist@ippr.org.na 22

SLIDE 23

Opportunities

Bold policy decisions needed to improve the infrastructure

– power (Kudu Gas, renewable energy), water (desalination plant), railway (upgrading needed)

Agriculture

Increase productivity in subsistence agricultural sector

through improved land management (conservation agriculture) through improved land management (conservation agriculture)

Agro processing and develop new products from agricultural

produce (such as Mahangu cookies etc.)

Investigate sustainable green scheme projects along the coast Explore potential of indigenous agricultural products further

(Hoodia, Devil’s claw, Bambara nuts, Maroela, etc.)

Develop capacity to undertake Research and Development

and invest in R&D (private and public funds needed)

29/09/2011 economist@ippr.org.na 23

SLIDE 24

Thank you Please visit IPPR’s web site for Please visit IPPR’s web site for further reports: www.ippr.org.na

29/09/2011 economist@ippr.org.na 24