Namibia’s GDP expected to slow
Namibia’s gross domestic product (GDP) is expected to slow in 2024 as a consequence of slowed global economic growth, PSG said in its outlook for 2024.
“We anticipate real GDP growth to slow from an estimate of 5.8% in 2023 to 3.1% in 2024, as the expected global growth slowdown will weigh on Namibian exports, while mining growth will subside due to base effects in oil exploration.
“Our projection is that global growth will slow from 2.7% in 2023 to 2.3% in 2024 due to elevated global interest rates and weaknesses in the US and Chinese economies.”
Deficit to narrow
Namibia’s trade deficit was expected to narrow in 2024, PSG noted.
“We anticipate the current account deficit will narrow from the gaping 9.6% of GDP in 2023 to 7.9% of GDP in 2024. The expected decrease in exports and customs union revenues is likely to be offset by a drop in fuel and food import costs, a deceleration in the growth of services linked to mineral exploration, and an increase in tourism income,” PSG explained.
“In the medium term, the current account deficit is projected to stay relatively high due to the demand for foreign services by substantial foreign direct investment projects,” it added.
Inflation was expected to remain subdued throughout the course of the year and moderate to 4.9% in 2024, PSG said.
Inflation to moderate
“Our short-term inflation outlook has improved moderately due to recent downward revisions in our global fuel and food price assumptions. We project inflation will moderate from 5.9% in 2023 to 4.9% in 2024.”
Oil exploration activities were expected to expand in 2024, following promising discoveries made by both Shell and TotalEnergies in 2022, PSG said.
“We expect diamond production growth will moderate as a result of a pronounced downturn in global rough diamond prices since March 2022. Although oil exploration activities are anticipated to continue to expand this year, we believe the growth in exploration and its impact on mining production will moderate due to base effects.”
“We anticipate real GDP growth to slow from an estimate of 5.8% in 2023 to 3.1% in 2024, as the expected global growth slowdown will weigh on Namibian exports, while mining growth will subside due to base effects in oil exploration.
“Our projection is that global growth will slow from 2.7% in 2023 to 2.3% in 2024 due to elevated global interest rates and weaknesses in the US and Chinese economies.”
Deficit to narrow
Namibia’s trade deficit was expected to narrow in 2024, PSG noted.
“We anticipate the current account deficit will narrow from the gaping 9.6% of GDP in 2023 to 7.9% of GDP in 2024. The expected decrease in exports and customs union revenues is likely to be offset by a drop in fuel and food import costs, a deceleration in the growth of services linked to mineral exploration, and an increase in tourism income,” PSG explained.
“In the medium term, the current account deficit is projected to stay relatively high due to the demand for foreign services by substantial foreign direct investment projects,” it added.
Inflation was expected to remain subdued throughout the course of the year and moderate to 4.9% in 2024, PSG said.
Inflation to moderate
“Our short-term inflation outlook has improved moderately due to recent downward revisions in our global fuel and food price assumptions. We project inflation will moderate from 5.9% in 2023 to 4.9% in 2024.”
Oil exploration activities were expected to expand in 2024, following promising discoveries made by both Shell and TotalEnergies in 2022, PSG said.
“We expect diamond production growth will moderate as a result of a pronounced downturn in global rough diamond prices since March 2022. Although oil exploration activities are anticipated to continue to expand this year, we believe the growth in exploration and its impact on mining production will moderate due to base effects.”
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