The Bank of Namibia (BoN) released its August Economic Outlook earlier this week.
The BoN anticipates Namibia’s real GDP growth to moderate to 3.3 percent y/y in 2023 from 4.6 percent y/y in 2022. The central bank cited weak domestic consumption coupled with large base effects in the diamond mining sector as drivers for this slowdown. Risks to the domestic economy highlighted by the Bank include global monetary policy tightening, a high inflationary environment, the continued impact of the Russia/Ukraine war on fuel and food commodities, and water supply disruptions brought by El Nino conditions which pose a risk to the uranium mining sector.
It is worth noting that load-shedding in South Africa continues to put pressure on domestic prices through imported inflation. Going forward, growth is expected to slow further to 3.0 percent y/y in 2024 and 2.9 percent y/y in 2025. The main growth drivers will be improving mining activity as well as a recovery in tourism, while the BoN expects that the outlook for other key sectors will remain lacklustre.