GDP growth forecast revised up, inflation down

The Bank of Namibia (BoN) has revised the economic growth forecast for 2023 upwards from 3% to 3.3%, an increase of 0.3 percentage points. According to the Namibia Statistics Agency (NSA), the domestic economy grew by 4.6% in 2022. During the first quarter of 2023, the Namibian economy expanded by 5%. Year-to-date, the Namibian economy continued with its positive momentum, with increased activity in the mining, livestock marketing, wholesale and retail trade, communication and tourism sectors, the central bank said.On another positive note, inflation was revised downwards and is now expected to average 5.6% in 2023 from 6.1%. Between January and July, inflation averaged 6.2%.According to PSG’s Economic Outlook report released mid-July, real gross domestic product (GDP) growth is estimated to moderate to 3.1% in 2023. This is mainly the result of the rise in domestic interest rates which will weigh on private consumption, and an anticipated moderation in export growth in second half of 2023 due to weaker global economic growth.Externals risks to the domestic economic outlook include weakening global economic activity, tighter global monetary policy, elevated crude oil prices and continued geopolitical tensions, the central bank pointed out.Namibia’s import bill averaged N$10.5 billion in the first half of 2023, while export earnings averaged N$8.6 billion in the first six months of 2023. Year to date, the central bank increased the repo rate by 100 basis points to 7.75%.OilFin24 reported that global oil supply plunged by 910 000 barrels per day in July, to 100.9 mbd, according to a report by the International Energy Agency (IEA).A sharp reduction in production by Saudi Arabia last month saw output from the 23-nation OPEC alliance fall 1.2 million barrels per day, to 50.7 mbd “a near two-year low.Oil producers are grappling with falling prices and high market volatility, reflecting the continued fallout from the Russian invasion of Ukraine and China’s faltering economic recovery.Saudi Arabia announced that it was extending its voluntary oil production cut of one million barrels per day for another month including September.Moscow has pledged, too, to cut production by 500 000 barrels per day in August, and a further cut of 300 000 bpd for September.“Market balances are set to tighten further into the autumn as Saudi Arabia and Russia extend supply cuts at least through September,” IEA said.“If the bloc’s current targets are maintained, oil inventories could fall in the second half of the year with a risk of driving prices still higher,” IEA added. Lastly, internal risks include the current drought, uncertain rainfall conditions, water supply interruptions, particularly at the coastal towns and general infrastructure constraints, BoN said.-phillep@nmh.com.na

GDP growth forecast revised up, inflation down

Comments

Namibian Sun 2025-08-29

Please login to leave a comment

GDP growth forecast revised up, inflation down

Comments

Namibian Sun 2025-08-29

Please login to leave a comment

Login