Simonis Storm has maintained that Namibia’s GDP will grow at 3.7% for 2023 which ranks higher than other forecasts on the economy. Simonis said sentiment has shown an upward shift, notably driven by the promising prospects offered by Namibia’s green hydrogen and oil and gas sectors.
“Nevertheless, amidst the multitude of information in the media, there remains an expectation to witness the actual realisation of these developments,” it said.
The research firm said the strong momentum post the pandemic can only carry the economy for so long.
“Positive sentiment and mindsets have the power to turn things around, but this can lose steam if reforms, forward thinking ideas, embracing views of the youth and material signs of progress in addressing long overdue issues do not take place,” Simonis said.
The Bank of Namibia has forecast the economy to grow 3.3% this year while the IMF forecast the economy to grow by 2.8%.
The central bank said in August that Namibia’s GDP growth is projected to moderate in 2023 and 2024. Following the 4.6% growth realised in 2022, real GDP growth is estimated to slow to 3.3% in 2023 and 3%in 2024.
The bank said the estimated growth for 2023 has been revised upwards from 3% published in the March.
This is mainly based on better than earlier anticipated performance for construction, hotels and restaurants, wholesale and retail trade, public administration and defence and education, amongst other sectors.
The central bank said risks to domestic growth are predominantly in the form of ongoing monetary policy tightening globally, high costs of key import items and water supply interruptions affecting the coastal towns.
An expected global slowdown in 2023 and 2024 is expected to reduce external demand for Namibia’s exports. Furthermore, the war between Russia and Ukraine is likely to continue for longer, resulting in higher prices for affected commodities.
The central bank said risks to the economy include electricity cuts in South Africa and uncertain weather conditions.
The IMF said economic activity in Namibia is projected to grow at 2.8% in 2023, down from 4.6% in 2022, due to relatively high inflation, monetary tightening, and lower growth in South Africa and Europe.