Chamwe Kaira
The Namibian economy is projected to grow to 6.6% in 2023, 7.1% in 2024 and 7.7% in 2025, the United Nations said in a World Economic Situation and Prospects 2024 report.
The report said economic growth in Africa is projected to remain modest, edging up from an estimated 3.3% in 2023 to 3.5% in 2024 as the region is buffeted by the global economic slowdown and tighter monetary and fiscal conditions.
The UN said debt sustainability risks will continue to undermine growth prospects. The impacts of the climate crisis are a growing challenge for key sectors such as agriculture and tourism. Geopolitical instability will continue to adversely impact several sub regions in Africa, notably the Sahel and North Africa, it said.
The report said the world economy proved more resilient than expected in 2023 amid significant monetary tightening and lingering policy uncertainties worldwide, even as multiple shocks arising from conflict and climate change wrought havoc on the lives and livelihoods of millions, further jeopardising progress towards sustainable development.
The UN said several large developed economies showed remarkable resilience, with robust labour markets supporting consumer spending despite sharp monetary tightening. At the same time, inflation gradually declined in most regions on the back of lower energy and food prices, allowing central banks to slow or pause interest rate hikes.
The report said as the global economy braces for the lagged effect of sharp interest rate increases, the major developed country central banks have signalled their intention to keep interest rates higher for longer.
“The prospects of a prolonged period of higher borrowing costs and tighter credit conditions present strong headwinds for a world economy that is saddled with high levels of debt but also in need of increased investment, not only to resuscitate growth but also to fight climate change and accelerate progress towards the Sustainable Development Goals (SDGs). Moreover, tight financial conditions, coupled with a growing risk of geopolitical fragmentation, pose increasing risks to global trade and industrial production,” the report said.
The UN said global GDP growth is projected to slow from an estimated 2.7 per cent in 2023 to 2.4% in 2024. Growth is forecast to improve moderately to 2.7% in 2025 but will remain below the pre-pandemic trend growth rate of 3%.
