Namibia keeps repo rate steady, budget to support GDP

JOHANNESBURG (Reuters) - Namibia's central bank left its lending rate unchanged for the fourth straight meeting, saying that although the economy was resilient, weak global growth has been dragging on the resource-rich country's mineral exports.

"The repo rate needs to remain low to support the economy and mitigate, as far as possible, the impact of endured slow growth in many of our trading partners," the Bank of Namibia said in a statement on Wednesday.

The bank maintained its GDP forecast of 4.4 percent for 2013, compared with an estimated 5 percent growth rate in 2012.

Namibia is one of the world's biggest producers of diamonds and a major source of uranium. Slowing growth in China, the world's biggest commodities consumer, and debt worries in Europe, a major export region, have put pressure on the country's mining sector.

The central bank said the government had a healthy 2012/13 fiscal position that resulted in a large build-up of cash, which would be used to support the economy.

"The government budget will support domestic production and consumption through relatively high levels of expenditure and tax relief."

The government announced planned corporate and income tax cuts in February when it forecast a relatively small budget shortfall of 2.8 percent of GDP for the 2012/13 year.

Inflation in the southern African country quickened slightly to 6.3 percent in March and the bank expects price growth to remain manageable over the short to medium term.

Source: http://news.yahoo.com/namibia-keeps-repo-rate-steady-5-5-percent-113449535--business.html

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