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The International Monetary Fund’s latest consultation report indicates that the local economy’s GDP growth reached 4.6 percent in 2022 on the back of sustained mining growth and recovery in tourism.
This year, the growth is estimated at 3.2 percent, as economic activity is assessed to have now surpassed the pre-pandemic level.
“Inflation, which rose sharply in 2022 due to high international oil and food prices, has eased below 6 percent, but is susceptible to resurgent fuel prices in recent months,” IMF noted.
In addition, the current account deficit widened in 2022 to 12.8 percent as the spike in fuel prices inflated the import bill.
“With the SACU receipts resurging in 2023 and a pick-up in FDI inflows, including related to oil exploration, official reserves remain adequate. The fiscal deficit has narrowed and is projected to drop below four percent of GDP this fiscal year as pandemic-related spending pressures eased, the public wage bill growth has been contained, and performance of state-owned enterprises improved.,” reads part of the IMF report.
IMF highlighted that the current account deficit is subject to large revisions and will remain elevated due to the intensifying oil exploration.
“But it will gradually narrow on the assumption that international energy prices normalize and global demand for key commodities in Namibia, namely uranium, diamonds, and fish, remains robust in the medium-term.”
Meanwhile the IMF has noted that the oil exploration and developments related to prospective green hydrogen production have gathered momentum and represent an upside potential, although final investment decisions are yet to be announced.
