The Bank of Namibia (BoN) released its Economic Outlook update for March 2023, projecting a 3% growth in the domestic economy for 2023 and a further 2.9% growth in 2024.
The forecast indicates a moderation in GDP growth from 4.2% in 2022, as the country’s economic growth is expected to improve in 2022 before slowing down in the subsequent years.
According to the central bank, the revision in the 2022 growth is mainly due to strong growth in diamond mining and sustained growth in most industries in secondary and tertiary sectors.
However, the Bank of Namibia warns that risks to domestic growth are predominantly in the form of monetary policy tightening globally, as major central banks around the world continue to tighten monetary policies. This could lead to a global slowdown in 2023, which could impact Namibia’s economic growth.
The high costs of key import items such as fuel, wheat, and cooking oil are also expected to remain for the entire forecast period, which could affect the country’s economy, as Namibia is a net importer of these commodities.
Domestic risks include water supply interruptions that continue to affect mining production at the coast and energy challenges in the region. There is also uncertainty about the effects of climate change going forward, which could further impact Namibia’s economic growth.
Finance and Public Enterprises Minister Iipumbu Shiimi predicts that the domestic economy will grow by 4% in 2022, against the revised estimates of 2.8% published in the FY2022/23 Mid-Year Budget Review, 3.2% this year, before slowing to 2.2% in 2024.
