Bank of Namibia Governor Johannes !Gawaxab says Namibia’s economy has turned the corner from the bleak 2016-2020 period that was marred by contractions where the domestic economy suffered negative growth.
This comes as for the second consecutive year, the domestic economy is forecast to grow by 3,2% in 2022, sustaining a positive growth of 2.7% registered in 2021.
“The titanic is shifting towards a more positive territory. Monetary stability is the best contribution the Bank of Namibia can make in the long run to contribute towards high levels of employment and sustained economic development for the country as the country exits a gloomy period worsened by the worst contraction in history because of the Covid-19 pandemic which wiped out socio-economic gains and caused massive job losses in key industries,” he told a stakeholders’ engagement meeting.
“Namibia is a country with credible plans and opportunities. Our fortunes are turning, and the central bank is committed to ensuring price stability to provide a foundation for sustained economic recovery and sustainable economic development going forward.”
The BoN Governor said the role of the central bank of safeguarding macroeconomic stability is becoming more pronounced, amid inflationary pressures which have been building up since the beginning of the year, with Namibia’s inflation forecasted to average 6.1% this year from 2.2% in 2020 and 3.6% in 2021 owing to the conflict between Russia and Ukraine and supply chain disruptions, which have driven up international fuel prices and food prices.
“The best thing a central bank can do is for any economy is to prevent it becoming the major source of economic disturbance, as the renowned economist Milton Friedman once said. As the monetary authority we cannot shy away from our responsibility to fight inflation within the confines of and effectiveness of the instruments at our disposal,” he said.
Finance Minister Ipumbu Shiimi in his October Mid-Year Budget Review has, however, revised downwards the country’s 2022 growth projections from 2.9% to 2.8% citing global factors such as high interest rates and inflation as well as disruptions of supply chains.
The treasury boss also slashed next year’s economic forecast to 3.4% down from the initial projection of 3.7%.