Namibia’s economy to grow by 3% in 2022

Namibia’s economy is expected to grow by 3% this year, followed by 3.2% in 2023, the International Monetary Fund (IMF) said during a virtual press conference this afternoon.

Real gross domestic product (GDP) growth will be supported by robust diamond, gold and uranium production, and rebounding tourism, Giorgia Albertin, IMF mission chief for Namibia, said.

The press conference was the result of the IMF’s annual Article IV Consultation discussions with Namibia.

According to the IMF, average inflation would rise to 6.4% in 2022 and start to moderate in 2023.

Namibia’s current account deficit will remain large, financed by foreign direct investment (FDI) inflows in oil and gas and one-off transactions. The fiscal deficit is expected to narrow, supported by strengthened tax revenues and fiscal consolidation measures.

“Spillovers from the war in Ukraine, a slowdown of the global economy and weaker non-oil commodity prices could further exacerbate inflation, worsen imbalances, and undermine the recovery,” Albertin said.

“Preserving macroeconomic stability, advancing structural reforms and protecting the most vulnerable is key to foster private sector-led and inclusive growth and reduce unemployment and inequality,” added.

Albertin said implementing governments’ fiscal consolidation strategy is crucial to preserve debt sustainability.

“Containing the wage bill, advancing the reform of state-owned enterprises, and strengthening tax administration is key. In parallel, it is important to preserve social spending and growth-supporting public investment and mitigate the impact of higher food and fuel prices on the poorest. Strengthening the public financial framework will support the fiscal consolidation,” she said.

“Structural reforms to support economic diversification and enhance productivity are progressing. Improving the business climate, fostering access to finance, strengthening governance, and reducing skills mismatches is key to foster growth,” Albertin noted.