Windhoek: The Bank of Namibia’s latest bulletin highlights a slowdown in the country’s economic growth during the first quarter of 2025, attributing the deceleration to global uncertainty, inflation, and mounting external deficits.
According to Namibia Press Agency, the media release issued by BoN’s Director of Strategic Communications and International Relations, Kazembire Zemburuka, indicates that Namibia’s GDP growth moderated to 2.7 per cent in the first quarter, a decrease from 4.8 per cent in the same period last year. Despite this being the sixteenth consecutive quarter of positive growth, the momentum has notably slowed.
The report attributes the slowdown to mixed sector performances. While the mining sector, particularly in uranium, zinc, and gold, showed strength, this was counterbalanced by a decline in diamond production and weaker outputs in agriculture, manufacturing, and construction. The tertiary sector, including health, finance, retail, and tourism, remained the main driver of growth.
BoN
pointed out an inflation rise, climbing to 3.7 per cent during the quarter, up from 3.1 per cent in the previous quarter. This increase was primarily driven by higher transport and food prices, although annual inflation eased compared to the same period in 2024.
On the fiscal side, government debt increased to N.dollars 166.7 billion, equating to 66.3 per cent of GDP, slightly exceeding the SADC benchmark. The current account deficit widened to N.dollars 15.2 billion, driven by increased outflows related to oil exploration and higher dividend payments to foreign investors.
The bulletin also noted improved private sector credit demand, supported by lower inflation and a more accommodative monetary policy stance. The repo rate was reduced to 6.75 per cent in February 2025, which helped ease borrowing conditions.
Globally, the report observed that economic growth remained subdued, with financial markets experiencing heightened volatility due to geopolitical tensions, including the Israel-Iran conflict. Commod
ity prices were mixed, with gold and copper prices surging while diamond prices fell, posing a downside risk to Namibia’s export earnings and foreign reserves.
BoN cautioned that while the economy remains resilient, risks persist, particularly from global trade tensions, policy uncertainty, and commodity price volatility.