By Kaleb Nghishidivali
Windhoek, Aug. 23 — The Bank of Namibia has unveiled its economic outlook for 2023, projecting a decline rate of 3.3% for the country. This marks a slight decrease from previous estimates and reflects a moderation from the 4.6% growth achieved in 2022. The projections for 2024 indicate a further deceleration to 3.0%.
Globally, the International Monetary Fund (IMF) anticipates a slowdown in economic growth, with projections dropping from 3.5% in 2022 to 3.0% in 2023. Advanced economies are predicted to experience a contraction in output from 2.7% in 2022 to 1.5% in 2023 due to multiple factors, including stringent monetary policies, financial stress, ongoing conflicts, and geopolitical uncertainties.
However, emerging markets and developing economies are projected to maintain stable growth at 4.0% in 2023 and 4.1% in 2024, with China being a significant driver of this growth. Excluding China, emerging markets might encounter challenges due to domestic monetary policy tightening, fiscal consolidation, and weakening external demand. Furthermore, the interplay between rising global interest rates and depreciating currencies in emerging markets could limit fiscal capacities, especially for economies heavily reliant on oil and food imports.
The Bank of Namibia’s Economic Outlook highlights multiple risks to both the global and domestic economies. The ongoing Russia-Ukraine war, escalating inflation, and tighter financial and monetary conditions pose significant downside risks. Moreover, the delayed recovery in China and its potential impact on global trade and commodity prices compound the outlook.
On the domestic front, Namibia faces risks such as global monetary tightening, elevated import costs, and water supply interruptions affecting coastal towns. As major central banks worldwide tighten monetary policies, the resultant global slowdown is likely to impact external demand for Namibia’s exports. The prolonged Russia-Ukraine conflict could lead to higher prices for commodities affected by the conflict.
Additional key risks to domestic growth encompass ongoing interruptions in water supply affecting coastal mining production, potential spillover effects from electricity shortages in South Africa, and uncertain weather conditions that might adversely affect crop yields in Southern Africa.
Despite these risks, certain sectors are displaying positive performance, contributing to the upward revision of the growth estimate for 2023. Construction, hospitality and dining, wholesale and retail trade, public administration and defence, and education are among the sectors propelling growth in Namibia.
The Bank of Namibia emphasizes the importance of monitoring these risks and implementing appropriate policy measures to ensure sustained economic growth and stability in the country.-Namibia Daily News
