KEY ISSUES Context. Namibia has achieved robust growth with price stability, though high unemployment and inequality persist. Its expansionary fiscal policy?while contributing to job creation?has increased pressures on external balances, lowering international reserves to 1½ months of imports. Risks. The near-term outlook is clouded with risks. Revenues from the Southern African Customs Union (SACU) are expected to decline in coming years, reflecting the slowdown in the South African economy. Rising house prices, combined with commercial banks' high exposure to mortgages, raise macroprudential concerns. These risks, unless properly addressed, could weaken growth and increase the economy's fragility. Strengthening international reserve buffer. A tighter fiscal policy stance-coupled with additional external financing-could strengthen international reserves over the medium term, while preserving critical social spending. Safeguarding financial stability. The rapid rise in real estate prices-combined with the high concentration of banks' mortgage lending-poses risks to the financial sector and the economy. This risk should be promptly addressed through targeted macroprudential policies and improved supervision of links between the banking and nonbank financial sector
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|Size: ||9.8 MB|
|Publisher: ||INTERNATIONAL MONETARY FUND|
|Date published: || 2015|
|ISBN: ||9781513523637 (DRM-EPUB)|
|Read Aloud: ||not allowed|