The central bank expects growth in agriculture, forestry and fishing is expected to turn negative during 2023 and 2024, due to inconsistent rainfall patterns and reduced fishing quotas.
The expected onset of El Niño late 2023 and/or early 2024 poses a downside risk to crop production in Southern Africa during 2023-2024 season, the central bank states.
The Bank of Namibia said the diamond mining sector is expected to register a moderate growth rate during 2023, but a slowdown when compared to 2022, as production levels get closer to the carrying capacity.
The uranium mining sector is expected to return to growth in 2023, with robust growth rates as mines take advantage of improved prices.
“Growth in metal ores is expected to improve during 2023 and to remain strong in 2024, largely driven by higher output from the gold subsector, which has the largest weight in metal ores sector.”
The central bank said overall GDP growth is expected to slow down in line with weaker global demand, but most sectors are expected to remain in a growth territory.
Government dependent sectors such as public administration and defence, education and health are expected to remain in the low growth territory due to fiscal consolidation, while the construction sector is only expected to return to growth in 2025, the central bank said.
The central bank said risks to domestic growth are predominantly in form of monetary policy tightening around the world and high costs of key import items that are likely to persist for a long time.
“Major central banks in the world are tightening monetary policies at a fast pace, the phenomenon that is expected to result in a global slowdown in 2023 and 2024. Furthermore, the war between Russia and Ukraine is likely to continue for some years and so is the high prices for affected commodities for which Namibia is a net importer.”
The central bank said other domestic risks include water supply interruptions that continue to affect mining production at the coast, lab grown diamonds may pose risks to demand of natural diamonds as well as on the ongoing uncertainties impact of climate change.
