Namibia's credit growth expects modest uptick as economy emerges from recession: Fitch

Source: Xinhua| 2019-01-30 20:41:59|Editor: ZX
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WINDHOEK, Jan. 30 (Xinhua) -- Namibia's banking sector activity is set for a modest uptick in 2019 as the economy exits recession, according to Fitch Solutions Macro Research.

The firm, a unit of Fitch Group, said in an outlook for Namibia's banks published on Wednesday that the modest credit expansion will be driven by a rebound in mining sector growth and a gradual improvement in consumer confidence.

"We forecast credit to expand by 8 percent in 2019 as the economy returns to modest growth rising from an estimated 6 percent growth rate in 2018," the firm said.

Indeed, the recovery in credit growth will build on a trend that has its roots in the second half of 2018, the research firm added.

Meanwhile, the firm said household demand remains under considerable pressure due primarily to high leverage and unemployment, which coupled with a slower than expected recovery in other sectors of the economy, will keep credit growth sluggish.

"Any improvement to household demand is likely to happen only at a very gradual pace due to on-going challenges faced by consumers," the firm added.

According to the firm, households continue to comprise the single largest component (48.5 percent) of commercial bank lending.