Finance and Public Enterprises Minister Iipumbu Shiimi says Namibia’s economic growth accelerated last year more than initially anticipated.
Tabling the 2023-2024 National Budget on Wednesday, the Minister revised upwards growth figures for the domestic economy to 4% in 2022, against revised estimates of 2.8% published in the FY2022/23 Mid-Year Budget Review.
“The stronger growth reflects higher-than-expected outturn for most key indicators in the preliminary data. Furthermore, the slowdown in international fuel prices over the last half of 2022, despite the on-going geopolitical tensions, has also served as a boost to economic activities in most sectors,” he said.
For 2023, Shiimi forecasts growth to moderate to 3.2%, reflecting revised mining production estimates, before slowing further to 2.2% in 2024.
“In this regard, growth is expected to be anchored by activities in the mining sector and tertiary industries as well as recovery in most sectors of the secondary industries,” he said.
“In the near term, there are still downside risks to the domestic economy. As such, it is imperative to continue with ongoing policy efforts to maintain fiscal sustainability through anchoring market expectations and containing sovereign borrowing costs. At the same time, it is critical to drive the necessary reforms to enable broad based economic expansion in key sectors, especially those with significant potential for employment creation such as agriculture, tourism, and services.”
With regard to inflation, Shiimi said the domestic prices still remain on the high side, although there are indications of probable moderation in the near term.
“In this context, the annual inflation rate increased to an average of 6.1 percent during 2022 in contrast to 3.6 percent in 2021. The recent data prints for January 2023 point to an annual inflation rate of 7.0 percent, implying persistent price pressures on already constrained businesses and households.”
Analyst forecast
RMB Namibia
RMB Namibia predicts a moderation of GDP growth from 4.1% in 2022 to 3% in 2023, driven by the performance of the primary industries, including the mining and exploration sector.
Inflation is also expected to decline in 2023, averaging 5.2% compared to 6.1% in 2022.
Cirrus Capital
Cirrus Capital predicts growth in 2022 at 3.8% and a slight slowdown to 3.5% in 2023, with the mining sector expected to continue its recovery, and the construction and agriculture sectors remaining a concern.
PSG Namibia
PSG Namibia forecasts a moderation in real GDP growth from 3.9% in 2022 to 2.6% in 2023 due to a global slowdown and weaker domestic demand.
Simonis Storm
Simonis Storm predicts growth of 5.1% in 2022 and 3.7% in 2023, with inflation reducing from 6.1% in 2022 to 5.3% in 2023.
