Namibia has revised its 2025 economic growth forecast downward to 3.3%, from the 4.5% projected in March, as a slump in manufacturing activity weighs on overall performance, Finance Minister Ericah Shafudah announced on Tuesday.
In her mid-year budget review, Shafudah explained that manufacturing output has been dampened this year by lower diamond processing alongside declines in cement and blister copper production.
Despite the challenges in manufacturing, the outlook for the country’s primary sector remains more optimistic, with growth expected at 2.5% this year compared to 1.8% in 2024, driven by increased uranium and other mineral production.
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Shafudah also noted that the government now projects average growth of 3.6% over the next three fiscal years, down from the earlier estimate of 4.3%. At the same time, she warned of a worsening fiscal position.
Namibia’s budget deficit widened to 4.0% of gross domestic product (GDP) in the last fiscal year, compared with 2.0% the previous year.
“If left unattended, (the worsening trend) is highly undesirable and will lead to serious deterioration of key fiscal anchors such as the debt-to-GDP ratio,” Shafudah cautioned.
To support the slowing economy, Namibia’s central bank last week cut its benchmark lending rate by 25 basis points to 6.50%, aiming to stimulate growth amid weakening industrial output and mounting fiscal pressures, Reuters reported.
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Image Credit: Namibia
