The Bank of Namibia has forecast a slowdown in the country’s economic growth from 4.2% in 2023 to 3.1% in 2024, attributed to weakening global demand for minerals and the ongoing impact of drought.
In addition to a decrease in demand, high base effects from the mining sector are anticipated to further dampen growth in the industry for 2024.
The central bank noted that due to the interconnectedness of Namibia’s domestic economy with the global economy, the ongoing global trend of tight monetary conditions may continue to suppress purchasing power and consumer spending.
“The global trend of tight monetary conditions could continue to dampen the purchasing power and consumption. Risks to domestic growth are predominantly in the form of extended tight monetary policy globally and costs of key import items that are likely to remain high for the entire forecast period,” the Bank noted.
Moreover, the apex bank noted the geopolitical tensions will lead to sustained high prices for key imports.
“Furthermore, the war between Russia and Ukraine is likely to continue for longer, and so are the high prices for affected commodities for which Namibia is a net importer, including fuel, wheat and cooking oil,” BoN highlighted.
The BoN economic outlook for August highlighted domestic risks, including persistent water supply disruptions and the ongoing consequences of El Niño-induced drought.
“Other domestic risks include water supply interruptions that continue to affect mining production at the coast, potential spillover of electricity cuts in South Africa to Namibia, and the legacy of El Nino, which is having a negative impact on crop production in Southern Africa,” BoN said.
