Central Bank’s economic outlook forecasts slower growth in 2024
In its latest economic outlook released on Tuesday, the Bank of Namibia projects a slowdown in the country’s economy for 2024, followed by a modest improvement in 2025.
This revised projection reflects a downward adjustment of 0.2 percentage points from the October 2023 World Economic Outlook (WEO), primarily due to logistical challenges intensifying in neighboring South Africa.
The anticipated deceleration in economic growth is attributed to several factors, including subdued global demand and a slower expansion in the primary sector. GDP growth is forecasted to decline from 4.2% in 2023 to 3.7% in 2024, before edging up to 4.1% in 2025.
Notably, these projections represent an upward revision of 0.3 and 1.0 percentage points for 2024 and 2025, respectively, compared to similar forecasts released in the December 2023 Economic Outlook update.
Meanwhile, the central bank said risks to domestic growth persist, primarily stemming from water supply constraints, prolonged drought conditions, and elevated costs of key import items. Continued interruptions in water supply could impede mining activities along the coast, while adverse weather events may lead to spikes in food prices, exacerbated by disruptions in global supply chains.
Furthermore, the faltering growth trajectory in China poses a significant risk, potentially dampening demand for Namibian commodities. However, the outlook also highlights the potential for rebounding activities within the agriculture and mining sectors, which could contribute to the marginal improvement in GDP growth expected in 2025.
