The Bank of Namibia projects annual inflation to average 3.7% in 2026 and 3.4% in 2027, reflecting a moderate upward revision for 2026 in its latest forecast report released in April.
The central bank said domestic annual headline inflation slowed to 2.1% in March 2026, down 0.3 percentage points from the previous month, with housing, food and alcohol among the main contributors to the decline.
“Domestic annual headline inflation decreased to 2.1% in March 2026, translating into a 0.3 percentage point decrease from the previous month. The biggest contributors towards the decrease in the annual inflation rate were Housing (1.1 percentage points), followed by Food and non-alcoholic beverages and Alcoholic beverages and tobacco, contributing 0.4 and 0.3 percentage points respectively,” the central bank said.
In the short term, inflation is expected to trend upwards, rising to 2.9% in April, 3.0% in May and 3.1% in June 2026.
The medium-term outlook points to a gradual increase in inflation during the second quarter of 2026, driven largely by expectations of higher global oil prices.
“Through the medium term, the quarterly inflation forecast is projected to increase in the second quarter of 2026 mainly on the assumption of a higher oil price outlook. Overall, the baseline estimates suggest that headline inflation will average 3.7% and 3.4% in 2026 and 2027 respectively, reflecting an upward revision of 0.2 percentage points for 2026, while that of 2027 remains unchanged,” the bank said.
The Bank of Namibia said component-level projections indicate upward trends across most categories, including food, housing, transport and recreation, while communication remains in negative territory and education is expected to remain stable over the forecast period.
Looking ahead, the central bank said real GDP growth is expected to recover over the medium term, although at a slower pace than previously projected.
Growth is now forecast at 2.6% for 2026 and 2.9% for 2027, representing a downward revision from the December 2025 outlook.
“Downside risks to the growth outlook include the ongoing war in the Middle East, protracted supply chain disruptions and water supply challenges, especially for uranium mining activities,” the bank said.
