The Namibian Statistics Agency yesterday released Namibia’s Preliminary National Accounts for 2014. The domestic economy is estimated to have registered a slower rate of growth, of 4.5% in real value added in 2014, compared to 5.1% recorded in 2013. The main drivers behind this growth slowdown were the secondary and tertiary industries that recorded growth o f 4.7% and 6.3% compared to 8.4% and 7.2% in 2013, respectively.
These figures are far lower than our estimated growth of 6.9%, and appear somewhat different to the reality that can be seen on the street, in the various high frequency indicators monitored, company results and from the expansive policy position pursued by Government and the Central Bank. However, at the current point in time the accounts merely reflect preliminary data, which data is likely to be updated in the final version of the accounts.
Somewhat peculiarly, nominal GDP growth was excellent, at 16.7%, in line with the level seen in 2013. However, the deflator used to obtain real GDP was aggressive, at 11.7%, more than double the average consumer price inflation seen in 2014 (unfortunately, no producer price index yet exists for Namibia). By reducing this deflator (as we believe will be done in the final version of the National Accounts), real GDP growth would increase dramatically. It is our view that the deflators used over the past three years are inaccurate, resulting in a sizable understating of real growth in the local economy.
It is thus our belief that the current growth figures are notably understated, both on account of the aggressive deflator used, and incomplete data, and thus that the final accounts will see a sizable upward revision.
We are currently working on a more detailed review of the accounts, which will be released in coming days.
