Bank of Namibia Forecasts Moderate Economic Growth

Windhoek – The Bank of Namibia has forecasted a 3.9 percent growth in the domestic economy for the current year, with a slight deceleration expected in 2023 and 2024. The economic outlook update for December by the Bank of Namibia indicates a slow growth in the nation’s GDP, attributed to weaker global demand and a predicted contraction in agriculture.

According to Namibia Press Agency (NAMPA), Kazembire Zemburuka, the bank’s strategic communications and international relations director, stated on Friday that the economy is estimated to grow by 3.9 percent in 2023 before moderating to 3.4 percent in 2024. This projection represents a 0.6 percentage point increase from the August 2023 economic outlook, primarily due to stronger performance in mining and quarrying activities during the first half of the year.

However, Zemburuka noted that the growth in 2023 would represent a slowdown compared to the 7.6 percent registered in 2022. The anticipated slowdown is largely due to weaker demand in both global and domestic markets, influenced by high inflation and interest rates impacting consumer spending. The high base effect from the mining industry also contributes to this trend.

Zemburuka pointed out risks to domestic growth, including global monetary policy tightening and sustained high costs of key import items. He mentioned that major central banks’ rapid tightening of monetary policies is expected to lead to a global economic slowdown in 2023 and 2024. The ongoing conflict between Russia and Ukraine is also likely to continue impacting the prices of commodities that Namibia imports.

Other domestic risks highlighted include potential water supply interruptions affecting mining production and challenges posed by lab-grown diamonds to the demand for natural diamonds. Additionally, the ongoing uncertainty and impact of climate change are factors of concern.