Chamwe Kaira
The Bank of Namibia (BoN) has lowered its inflation forecasts for 2025 and 2026 by 0.2 percentage points to 3.6% and 4%, respectively, from its previous projection.
BoN governor Johannes !Gawaxab said the revision reflects a stronger exchange rate and a lower oil price outlook.
“Risks to the forecast remain exchange rate volatility and potential upticks in administered and oil prices,” he said.
Annual inflation averaged 3.6% during the first eight months of 2025, compared to 4.6% during the same period last year.
!Gawaxab said the decline was mainly due to lower prices in housing and alcoholic beverages and deflation in transport costs.
Consumer price inflation remained steady at 3.5% in September 2025, unchanged from July, after dipping to 3.2% in August.
The governor noted that private sector credit extension continues to recover, reaching a post-pandemic high of 5.8% in August 2025, compared to 5.7% in June.
The average growth rate stood at 4.9% during the first eight months of 2025, up from 2% a year earlier. “Overall, the improvement in PSCE was mainly driven by a stronger credit uptake by businesses, while households lagged,” he said.
Namibia’s trade deficit narrowed by 16.1% to N$17.9 billion in the first eight months of 2025, supported by higher export earnings, especially from uranium and gold.
International reserves stood at N$54.7 billion at the end of September, down from N$58.1 billion in July. The decline was linked to increased imports, foreign payments, and a stronger exchange rate. The reserves provided an estimated 3.6 months of import cover, which the central bank said remains sufficient to sustain the currency peg with the South African rand and meet external obligations.
Commodity prices have shown mixed trends. Gold prices have surged to record highs driven by safe-haven demand, while zinc prices rose on tighter supply. Copper prices remain high despite recent drops due to supply disruptions at major mines. Uranium prices continued to climb, supported by rising demand and supply constraints.
In contrast, crude oil prices eased due to increased supply and concerns over higher U.S. tariffs on Chinese goods. Diamond prices also declined slightly, reflecting continued competition from lab-grown stones.
Caption
Johannes !Gawaxab
- Photo: Bank of Namibia.
