In a latest Economic Outlook update for March 2023, released by the Bank of Namibia, the bank said Namibia’s domestic economy is projected to grow by 3.0 per cent in 2023 and by 2.9 per cent in 2024.
Kazembire Zemburuka, the Director of Strategic Communications and International Relations at the Bank of Namibia, made the announcement this on Wednesday. He explained that the real Gross Domestic Product growth is estimated to have increased to 4.2 per cent in 2022 but is projected to slow down to 3.0 per cent this year.
The estimated growth for 2022 has been revised upwards from 3.9 per cent as published in the December 2022 Economic Outlook update, mainly because of higher production volumes from the diamond mining sector and sustained growth for most industries in secondary and tertiary sectors, he said.
“The war between Russia and Ukraine is likely to continue for longer than expected, and so are the high prices for affected commodities for which Namibia is a net importer, including fuel, wheat, and cooking oil. Other domestic risks include water supply interruptions that continue to affect mining production at the coast, energy challenges in the region, and uncertainty about the effects of climate change going forward, he says.
He further says major central banks in the world continue to tighten monetary policies, a phenomenon he says is anticipated to result in a global slowdown in 2023, as a risk to the domestic economy.
According to the International Monetary Fund World Economic Outlook (IMFWEO) Update released in January 2022, global growth was estimated at 3.4 per cent for 2022 and is expected to slow down to 2.9 per cent in 2023.
“The estimate for 2022 and projection for 2023 are both 0.2 percentage points higher than the forecast from the October 2022 WEO, reflecting greater-than-expected resilience to headwinds across several economies,”Zemburuka said.
Zemburuka added that although the 2023 annual growth projection advocates for the global economy to avoid a recession, he points out that some economies are likely to experience a recessionary period at some point over the year.
Advance economies will have a growth of a sharpest slowdown as anticipated to slow to 2.7 per cent in 2022 and further moderate to 1.2 per cent in 2023, he says,adding that this slowdown will be experienced across about 90 per cent of countries in the Advance Economies group, especially in the Euro Area and the United Kingdom (UK).
The growth in emerging market and developing economies EMDEs is anticipated to improve slightly from 3.9 per cent in 2022 to 4.2 per cent in 2023 due to upward revisions in China, Russia, Brazil, and Mexico, he indicates.
The growth projection for 2023 has been revised upwards by 2.6 percentage points from the October 2022 WEO, due to the relaxation of China’s zero Covid Policy and the Russian economy fared much better than initially expected.
According to the Economic Outlook document released by the Bank of Namibia, growth in Sub-Saharan Africa is projected to remain flat at 3.8 per cent in 2022 and 2023. The projection for 2023 has been revised upward by 0.1 percentage points since the October 2022 WEO.
The document further indicates that Nigeria and South Africa have the largest economies in the region, with projected growth of 3.2 per cent and 1.2 per cent, respectively, in 2023.
T the Russia-Ukraine war has reflected the risk to the global outlook to remain on the negative side, with surging inflation, and tighter financial and monetary conditions. Local Economist Salomo Hei told this Publication that the projection of the current economic outlook is fine, adding that the IMF does not have an impact on the economy since the growth will come through diamond production and many other industries that contribute more to the domestic economy.