Namibia’s economic growth outlook has been downgraded, with gross domestic product now projected to slow to 1.9% year on year in 2026, before recovering to above 3% over the medium term.
The revised forecast is lower than earlier expectations, according to the latest Macro Update by FNB Namibia.
Growth for 2025 has been revised down to 2.4%, following weaker-than-expected performance in the first three quarters of the year, during which the economy expanded by 1.99% compared with the same period in 2024.
“For the third quarter of 2025, we have downgraded our GDP growth forecasts to 2.4% year on year for 2025 and 1.9% year on year for 2026, while cautioning that risks to the medium-term outlook remain tilted to the downside,” the update said.
Looking ahead, the bank said some cyclical improvements are expected to support growth. Agricultural activity is likely to recover, with positive spillover effects for downstream meat processing and manufacturing.
Mining output is also forecast to strengthen, supported by renewed oil and gas exploration activity, with TotalEnergies’ final investment decision anticipated in the second half of 2026.
Increased investment in water supply and electricity generation is expected to lift output in the utilities sector, while tourism may benefit from higher levels of business-related travel, supporting wholesale and retail trade.
“Growth in electricity and water should improve and will be supported by capital investment in water supply and electricity generation projects. Tourism is also likely to benefit from increased business-related activity, creating spillover effects for wholesale and retail trade,” the report said.
However, these positive developments are expected to be offset by persistent structural and fiscal constraints.
Ongoing fiscal fragility is likely to weigh on domestic demand as fiscal consolidation measures are implemented in 2026, dampening development spending and slowing construction activity.
High unemployment and rising inflation, particularly escalating housing costs, are also expected to continue constraining private consumption, limiting broad-based growth in domestic demand.
Regulatory burdens and policy uncertainty are further expected to restrain investment and delay key economic developments.
In this context, the report noted that policy direction will be critical, with the Namibian Investment and Promotion Act, expected to be tabled in 2026, and the anticipated Budget update early in the year seen as important signals for investor confidence.
