Namibia’s economy is projected to grow by 3.0% in 2025, supported by cyclical improvements in agriculture, a rebound in manufacturing, and strong tourism performance, according to analysts.
Early data shows the economy expanded by an average of 2.5% in the first half of the year, signalling a slower-than-expected start but leaving scope for recovery in the second half.
FNB Namibia Economist Helena Mboti said agriculture will support both primary production and downstream meat processing, while tourism is expected to surpass 2019 levels during the third-quarter peak season.
“Therefore, while the 2Q25 print was weaker than expected, we maintain our view that GDP growth could still reach 3.0% in 2025, underpinned by the cyclical turnaround in agriculture and manufacturing, as well as sustained optimism in the business environment, which will continue to drive demand for services and tourism in 2H25,” Mboti said.
Mboti cautioned, however, that Namibia’s high unemployment rate of 55%, alongside sticky inflation and rising housing costs, continues to constrain private consumption.
She warned that if household weakness persists, growth could slow to 2.2% in 2025 before regaining momentum above 3% in the medium term. Despite these risks, she said growth remains comfortably above the pre-pandemic average of -0.8% in 2019, with business sentiment broadly optimistic.
Simonis Storm Junior Economist Almandro Jansen said GDP growth slowed to 1.6% year-on-year in the second quarter of 2025, reflecting uneven sector performance and weak household demand.
He said services, particularly tourism and retail trade, remain the main growth drivers, with tourism projected to expand by 5.5% this year and generate N$4.6 billion in revenue.
“Hotels and restaurants are expected to surpass 2019 levels during the 3Q25 peak season, reinforcing tourism’s central role,” Jansen said.
Jansen also pointed to supportive fiscal and monetary conditions, including N$4.3 billion in infrastructure-led spending on construction, energy and water projects, as well as a gradually easing repo rate, expected to fall to 6.50% by year-end.
He warned, however, that procurement delays, weak implementation capacity and inefficiencies in state-owned enterprises could limit the impact of budget allocations on real activity.
Agriculture remains a vulnerability, Jansen added, noting that the sector contracted by 3.5% in the second quarter, driven by reduced livestock marketing and an outbreak of lumpy skin disease, which depressed both abattoir throughput and live exports.
He said Namibia’s agricultural sector continues to face structural challenges, including low productivity, financing constraints, and high exposure to climate shocks.
“That said, there is potential for a cyclical rebound in the second half of the year, supported by improved rainfall prospects linked to La Niña and herd rebuilding efforts following sharp off-take in previous years. A stronger agricultural performance would also filter positively into downstream meat processing, which has been one of the hardest-hit manufacturing subsectors,” he said.
