NAMIBIA: On 4 September, the Ministry of Mines and Energy announced a fuel price increase that would take effect on 6 September 2023. Petrol prices will increase by 120 cents to N$20.98 per litre, while diesel prices will increase by 170 cents to N$20.75 per litre for diesel 50ppm and N$20.95 per litre for diesel 10ppm.
The Ministry attributes the increase to global oil supply cuts by OPEC+ countries; an increase in global oil demand attributed to increased air travel and increased use of oil in power generation; and a depreciation in the currency. The increase in fuel prices presents an upside risk to our inflation forecasts.
Private Sector Credit Extension (PSCE) decreased by 0.3ppt to 2.7 percent y/y at the end of July 2023, compared to 3.0 percent in the previous month. The slowdown in growth was driven by slower uptake of credit from corporates (-1.2 percent y/y in July from -0.1 percent in June). In this regard, corporates in the mining, wholesale, and retail trade, as well as financial and services sectors demanded less credit in July compared to June. Although overall credit demand continues to be driven by households (5.5 percent y/y), the demand remains concentrated in short-term credit facilities, primarily used to manage cash flow shortages. This type of credit is considered unproductive, and the growth is not adequate to stimulate real economic activity in the domestic economy.
