Shana Lazarus
Africa-Press – Namibia. Namibia’s economic growth is expected to decline for the rest of the year before picking up again next year.
This is according to the Bank of Namibia (BoN) economic outlook. The report notes that this decline is due to shortfalls in the diamond, manufacturing and livestock sectors.
“The Namibian economic growth is projected to decelerate in 2025 before regaining momentum in 2026.
Real gross domestic product growth is expected to moderate to 3.5% in 2025, slightly below the 3.7% for 2024,” reads the report.
The diamond industry is facing challenges due to the imposition of trade tariffs and rising competition from lab-grown alternatives, creating a decline in the global diamond commodity market.
“This continued downturn is driven by weak global demand, increased competition from synthetic alternatives, and reduced consumption in key international markets,” reads the report.
This is expected to continue and structural issues are likely to continue in the medium term.
Meanwhile, the livestock industry was negatively impacted by the 2024 drought leading to reduced herd sizes.
“The livestock sub-sector continues to deal with the lingering effects of the 2024 drought, which presented significant challenges for farmers. As a result, farmers face limited availability of market-ready livestock in 2025,” notes the report.
Additionally, the manufacturing sector is also set to experience a decrease in growth in the processing of meat, and basic non-ferrous metals. However, growth is expected to recover to 3.9% in 2026.
This is mainly going to be supported by growth in agriculture, a pick up in construction, and improved output in uranium and metal ores.
“In 2026, growth is forecast to rebound to 3.9%, supported by a recovery in agriculture, and sustained expansion in construction. The latest growth projections for 2025 and 2026 have been revised downward by 0.3% and 0.1% points, respectively, compared to estimates in the April 2025 economic,” reads the report.
BoN spokesperson Kazembire Zemburuka says the country could potentially face a rise in debts towards the end of the year.
This is due to potential trade disruptions stemming from protectionist trade policies, and inflationary pressures arising from ongoing global conflicts.
“The combined effects of declining Southern African Customs Union and diamond revenues could lead to rising debt sustainability risks, potentially necessitating expenditure rationing to restore fiscal space,” says Zemburuka.
Source: The Namibian
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