Business Reporter
NAMIBIA’S GDP growth is projected to slow in 2024, primarily due to subdued global economic growth affecting demand for minerals and the impact of drought.
According to an update provided by the Bank of Namibia, the Bank’s spokesperson, Kazembire Zemburuka, explained that real GDP growth is expected to moderate to 3.5% in 2024, down from 4.2% recorded in 2023.
“The moderation in growth is attributed to the weak performance in the primary industry, particularly the anticipated contractions in the diamond and crop farming sub-sectors. However, this projection marks an upward revision from the initial 3.1% estimate published in the August 2024 Economic Outlook. The revised estimate reflects better performances in metal ores (gold), livestock farming (marketing), health, information and communication, wholesale and retail trade, and taxes on products,” Zemburuka said.
He added that the main risks to Namibia’s domestic growth projections are the adverse effects of drought and weakened global commodity demand.
“Persistent drought conditions threaten agricultural output during and beyond 2024, while the recovery in diamonds depends on several external factors, namely, the recovery in global demand for natural diamonds, consumer differentiation between natural and lab-grown diamonds, and the resolution of trade wars, which are currently negatively affecting diamonds,” Zemburuka said.
However, growth is expected to rebound to 4.0% in 2025, supported by improving global conditions and domestic policy measures aimed at boosting economic growth. These policy measures include a reduction in personal income tax brackets and the easing of monetary policy.
The upward revision of the 2025 GDP growth forecast is based on improved prospects in the construction sector, driven largely by an increased development budget from the Government. The growth projection for crop farming in 2025 was also upgraded as the sector is expected to align with its long-term trend following two years of significant contractions.
