Stronger performance in mining and quarrying activities is expected to propel Namibia’s economy to a 3.9% growth in 2023, according to the Bank of Namibia (BoN).
“The estimated growth of 3.9% in 2023 marks an upward revision by 0.6% from the August 2023 Economic Outlook, primarily due to robust performance in other mining and quarrying activities during the first half of the year. Additionally, the growth projection of 3.9% in 2023 represents a slowdown compared to the 7.6% registered in 2022,” said Bank of Namibia Director of Strategic Communications and International Relations, Kazembire Zemburuka.
While the domestic economy is projected to grow by 3.9% in 2023, Zemburuka mentioned that it is forecasted to slow down in 2023 and 2024.
“The anticipated slowdown in the 2023 growth is largely due to weaker demand in global and domestic economies, influenced by high inflation and high interest rates negatively impacting consumer spending. Another contributing factor to the slowdown in 2023 growth is the high base effects from the mining industry. Risks to domestic growth primarily involve monetary policy tightening worldwide and high costs of key import items that are likely to persist for an extended period,” he explained.
To mitigate emerging risks, Zemburuka noted that major central banks worldwide are rapidly tightening monetary policies.
Furthermore, the ongoing war between Russia and Ukraine is likely to continue affecting commodities, for which Namibia is a net importer.
“Other domestic risks include water supply interruptions that may persist in affecting mining production at the coast. Lab-grown diamonds may pose risks to the demand for natural diamonds, along with the ongoing uncertainties surrounding the impact of climate change,” he said.
This comes as Finance and Public Enterprises Minister, Iipumbu Shiimi, forecasts growth of 3.5% this year, before slowing to 2.9% in 2024.
Shiimi, in his mid-year budget review, stated that the projections represent an upward revision from the earlier forecasts in the main budget of 3.2% and 2.2% for 2023 and 2024, respectively.
