Chamwe Kaira
FNB Namibia expects improvements in agriculture to support both the primary sector and downstream meat processing, while tourism is projected to recover strongly.
Hotels and restaurants are likely to surpass 2019 levels during the third-quarter peak season, the bank said.
Wholesale and retail trade are also expected to rebound if investment spending remains resilient.
“From 2026 onwards, low base effects will further support the rebound. Therefore, while the 2Q25 print was weaker than expected, we maintain our view that GDP growth could still reach 3% in 2025, underpinned by the cyclical turnaround in agriculture and manufacturing, as well as sustained optimism in the business environment, which will continue to drive demand for services and tourism in the second half of this year,” FNB Namibia economist Helena Mboti said in a GDP review for the second quarter.
Namibia’s real GDP grew by 1.6% year-on-year in the second quarter, slowing from 2.8% in the first quarter and 3.3% in the same period last year.
“The downward surprise was broad-based, with mining the only sector to report improved growth compared to the same period last year,” Mboti said.
On the expenditure side, household consumption fell by 7.2% year-on-year. Government spending rose by 4.2%, investment increased by 5%, and net exports helped cushion the slowdown, with exports up 18.5% and imports down 4.7%.
Mboti said broad-based growth remains difficult to achieve given Namibia’s 55% unemployment rate, sticky inflation, and rising housing costs, which continue to constrain private domestic consumption.
“If this drag from households persists and outweighs the pull from foreign investment, growth could slow to around 2.2% in 2025, before regaining momentum above 3% in the medium term.
Nonetheless, growth remains comfortably above the pre-pandemic average of -0,8% in 2019, and despite evident structural weaknesses, business sentiment on the ground remains broadly optimistic,” she said.
In the first quarter, FNB maintained its GDP growth forecasts at 3% for 2025 and 3.4% for 2026, while cautioning that risks to the medium-term outlook were tilted to the downside. Those risks partly materialised in the second quarter, with Namibia’s average growth for the first half of the year now at 2.5%.
“We maintain our 2025 GDP growth forecast at 3%, supported by a cyclical rebound in agriculture, tourism, and manufacturing as well as ongoing fiscal expenditure, although risks from weak household demand, high unemployment, and sticky core inflation could weigh on the outlook,” Mboti said.
Caption
Growth in the agriculture sector is expected to boost meat processing.
- Photo: Meatco
