Windhoek: The Namibian economy is projected to grow by 3.5 per cent in 2025, a slight slowdown from the 3.7 per cent estimated for 2024, according to the Bank of Namibia's (BoN) latest Economic Outlook released on Monday.
According to Namibia Press Agency, the deceleration is mainly due to a contraction in primary industries, particularly the livestock subsector, as herd sizes remain low following drought conditions in 2024. Diamond mining is also expected to continue its decline, reflecting weak global demand, the imposition of trade tariffs, and competition from lab-grown alternatives. The manufacturing sector is anticipated to weigh on growth as well, with notable contractions in meat processing and basic non-ferrous metals.
However, the bank forecasts a rebound in 2026, with real Gross Domestic Product (GDP) growth estimated at 3.9 per cent, driven by recovery in agriculture, sustained activity in construction, and improved output in uranium and other metal ores.
Globally, economic growth is expected to slow to 3.0 per cent in 2025 from 3.3 per cent in 2024, before edging up to 3.1 per cent in 2026, the International Monetary Fund's (IMF) July World Economic Outlook update shows. Advanced economies are forecast to see growth of 1.5 per cent in 2025, improving slightly to 1.6 per cent in 2026, while emerging markets and developing economies will grow by 4.1 per cent in 2025 and 4.0 per cent in 2026.
For sub-Saharan Africa, growth is projected at 4.0 per cent in 2025, unchanged from 2024, before rising to 4.3 per cent in 2026. Lower global oil prices are expected to support many economies in the region, while protectionist trade policies remain a challenge.
The statement warned that domestic risks include a further fall in diamond export earnings, trade disruptions linked to protectionism, and inflationary pressures from ongoing global conflicts. A decline in revenues from the Southern African Customs Union combined with reduced diamond income could heighten debt sustainability concerns and force expenditure cuts to restore fiscal space.