Windhoek: The Bank of Namibia’s Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 6.75 per cent to safeguard the currency peg with the South African Rand and support domestic economic activity. The decision was taken during the MPC’s fourth bi-monthly meeting of the year, held on 11 and 12 August, after a review of domestic, regional, and global economic conditions.

According to Namibia Press Agency, Governor of the Bank of Namibia, Johannes !Gawaxab, announced that domestic economic activity expanded in the first half of 2025, albeit at a slower pace than during the same period last year. Growth was supported by sectors such as mining, tourism, wholesale and retail trade, transport, communication, crop farming, and electricity, while the diamond mining subsector remained weak.

!Gawaxab noted that real gross domestic product growth is now projected at 3.5 per cent for 2025 and 3.9 per cent for 2026, down from earlier forecasts. The revision is mainly due to a contraction in primary industries, particularly the livestock subsector. Risks to the outlook include global trade policy shifts, lower diamond prices, geopolitical tensions, and domestic water supply interruptions in coastal towns.

Average inflation eased to 3.6 per cent in the first seven months of 2025 from 4.8 per cent a year earlier, primarily due to lower housing and alcohol prices as well as deflation in transport. Inflation for the year is forecast at 3.8 per cent, edging up to 4.2 per cent in 2026, both slightly below previous projections.

Private sector credit extension grew by 5.7 per cent in June 2025 compared to 4.5 per cent in April, with the average growth in the first half of the year at 4.6 per cent, more than double the 2.0 per cent recorded in the same period of 2024. The recovery was driven by increased credit uptake by businesses, especially in overdrafts, loans, advances, instalment sales, and leasing.

Namibia’s merchandise trade deficit narrowed by 28.2 per cent to N.dollars 12.8 billion in the first half of 2025 due to higher export earnings, particularly from uranium and gold, compared to a moderate increase in imports.