Chamwe Kaira
Namibia’s foreign reserves, inflation outlook and economic growth could face pressure if the conflict in the Middle East continues, Bank of Namibia governor Ebson Uanguta has warned.
Uanguta said the domestic economy remains stable for now, but risks linked to rising global oil prices and disruptions to shipping routes have increased following the war involving Iran, Israel and the United States.
“The situation remains fluid,” he said, warning that inflation and reserves could come under pressure if oil prices rise further and the Strait of Hormuz faces disruption.
He said Namibia had been benefiting from a stable inflation environment around 3%, but recent global developments have changed the outlook.
Uanguta stated that stronger export earnings, support from the Fuel Equalisation Fund, and government measures to maintain stability have so far cushioned the impact.
He warned that the situation may not hold if oil prices rise above US$120 per barrel.
“Any increased spending on oil imports will have an impact on the country’s reserves,” he said.
He said higher fuel costs and disruptions in the movement of goods could increase import costs and slow economic activity.
Uanguta said the central bank expects to maintain the minimum import cover needed to protect the Namibian dollar’s peg to the South African rand.
Namibia’s international reserves stood at N$51.8 billion at the end of March 2026, slightly lower than N$51.9 billion at the end of January.
This provides about 3.2 months of import cover, above the central bank’s minimum level.
The International Monetary Fund has also warned that the conflict poses risks due to higher fuel prices, weaker demand and commodity price volatility.
The central bank projects economic growth of 2.6% in 2026 and 2.9% in 2027, but Uanguta said these forecasts may be reviewed if the situation continues.
Global financial institutions have raised oil price forecasts. Goldman Sachs expects Brent crude oil to average US$90 per barrel in the fourth quarter, while West Texas Intermediate is projected at US$83.
The bank said rising prices and supply risks are starting to reduce global oil demand.
Consumption is expected to fall by 1.7 million barrels per day in the current quarter and by a further 100 000 barrels per day in 2026 compared to 2025.
