Construction and the services sector are expected to remain the main drivers of Namibia’s economic growth, supported by infrastructure development and oil and gas investment, although mounting domestic and global risks threaten to slow the country’s recovery, Standard Bank Namibia has warned.
Standard Bank Namibia Group Economist Helena Mboti said construction and the tertiary sector are expected to sustain growth momentum in the near term as infrastructure projects and energy investment continue to underpin economic activity.
“Looking ahead, construction and the tertiary sector are expected to remain the primary drivers of growth, supported by ongoing infrastructure investment and oil and gas-related activity. In contrast, the primary sector is likely to remain under pressure due to weaker commodity and crop production, while manufacturing will continue to face constraints from weak upstream output and subdued domestic demand,” Mboti said.
She warned, however, that a combination of global and domestic headwinds could weigh on growth over the coming quarters.
According to Mboti, escalating geopolitical tensions in the Middle East could weaken global commodity demand, affecting Namibia’s exports and broader economic performance.
At the same time, subdued household spending continues to constrain domestic demand, while climate-related risks are becoming more pronounced.
Mboti said the increasing probability of El Niño conditions could reduce rainfall, lowering agricultural production and hydroelectric power generation at the Ruacana Power Station.
“Climate-related risks are also becoming more prominent, with the high probability of El Niño posing downside risks to both agriculture and electricity generation through reduced rainfall and lower hydroelectric output, potentially weakening two sectors that have recently provided stabilising support and amplifying existing structural vulnerabilities,” she said.
She also warned that tighter monetary policy is expected to weigh on economic activity following the Bank of Namibia’s decision to increase the repo rate by 25 basis points to 6.75%.
“Lastly, the Middle Eastern conflict is expected to weigh on GDP growth through second-round effects on the import basket and reduced discretionary spending, further compounded by the impact of the 25bps increase in the repo rate to 6.75%,” Mboti said.
The outlook comes after the Namibia Statistics Agency reported that the economy expanded by 2.0% year-on-year in the first quarter of 2026, down from 2.8% in the corresponding period last year, indicating that economic growth is moderating despite continued support from services and infrastructure-related activity.
