The Bank of Namibia (BoN) has revised upwards its 2023 economic growth forecasts for the country to 3.9% in 2023, mainly on account of stronger performance in mining and quarrying activities.
“The estimated growth of 3.9% in 2023 marks an upward revision by 0.6% from the August 2023 Economic Outlook, mainly on account of stronger performance in other mining and quarrying activities during the first half of the year. Additionally, the growth projection of 3.9% in 2023 represents a slowdown compared to 7.6% registered in 2022,” said Bank of Namibia Director of Strategic Communications and International Relations, Kazembire Zemburuka.
While the domestic economy is estimated to grow by 3.9% in 2023, Zemburuka said it is forecasted to slow down in 2023 and 2024.
“The projected slowdown in the 2023 growth is largely on account of weaker demand in global and domestic economies, underpinned by high inflation and high interest rates that have a negative impact on consumer spending. Another factor contributing to the slowdown in 2023 growth is the high base effects from the mining industry. Risks to domestic growth are predominantly in the form of monetary policy tightening around the world and high costs of key import items that are likely to persist for a long time,” he said.
To cushion from emerging risks, Zemburuka said major central banks in the world are tightening monetary policies at a fast pace.
Furthermore, the war between Russia and Ukraine is likely to continue affecting commodities for which Namibia is a net importer.
“Other domestic risks include water supply interruptions that may continue affecting mining production at the coast, lab-grown diamonds may pose risks to the demand of natural diamonds as well as to the ongoing uncertainties impact of climate change,” he said.
This comes as Finance and Public Enterprises Minister, Iipumbu Shiimi forecasts growth of 3.5% this year, before slowing to 2.9% in 2024.
Shiimi in his mid-year budget review said the projections are an upward revision from the earlier forecasts in the main budget of 3.2% and 2.2% for 2023 and 2024, respectively.
In sub-Saharan Africa, growth is projected to slow down to 3.3% in 2023 before picking up to 4% in 2024.
