Namibian businesses are optimistic about the country’s economic and employment prospects in 2023, according to a recent survey conducted by Simonis Storm.
The study, which included responses from investment portfolio managers, business owners, managers, and CEOs of Namibian companies, also found that 47% of respondents plan to hire new recruits in 2023.
“The general sentiment among respondents is positive about the future of Namibia’s economy, with current business conditions having improved compared to last year,” noted Simonis Storm in its findings.
The tourism, mining, energy, and ICT sectors of the economy received the most optimism from respondents, while the construction, health, and transport sectors received the most pessimism.
Despite the positive outlook, only 15% of respondents believe that oil production off the coast of Namibia will bring benefits to the economy.
Simonis Storm noted that “low trust levels lead to skepticism about how oil revenues will be spent/allocated.”
The study also found that 55% of respondents expect local inflation to rise further in 2023, while 45% believe the interest rate hiking cycle will come to an end.
Simonis Storm forecasts inflation to decline from 6.1% in 2022 to 5.3% in 2023 and predicts the central bank will gradually normalize interest rates over the medium term.
Risks to economic growth in 2023, according to the study, include inflation, rising interest rates, poor political leadership, and a commodity price slump.
Simonis Storm forecasts a net increase of 25 basis points in the repo rate throughout 2023, bringing the rate to 7.00% at year-end.
The research firm also predicts a stronger Rand/USD exchange rate of 16.55 for 2023, with the end of rate hikes in the US and a weaker US dollar, combined with higher real interest rates in South Africa.
