WINDHOEK, May 22 (Xinhua) -- Namibian financial services firm, PSG Wealth Management, said Wednesday that amid the significant slump in agricultural output, the current drought will affect water-intensive industries, such as beverages and processed foods in the southern African country.
In an analysis of the drought situation, the firm said reduced local production of agricultural and manufactured goods will have to be covered by higher imports, which will put upward pressure on consumer prices.
"Furthermore, the worsening drought is straining an already tight government budget due to efforts to curb bulging public debt," PSG Wealth Management added.
The Namibian government currently set aside 573 million Namibian dollars (40 million U.S. dollars) for drought relief aid, which is already more than the 211 million Namibia dollars (14 million U.S. dollars) that the ministry of finance had budgeted for national emergencies and disasters for the current fiscal year.
"The severity of the drought is turning out to be worse than we expected and this is likely to adversely affect our GDP forecast," the firm said.
PSG Wealth Management firm said in its previous forecast round Namibian real GDP growth was projected to rebound modestly to 1.1 percent in 2019 from negative growth rates of 0.1 percent and 0.9 percent in 2018 and 2017.