Consumer recovery to drive economy
Recovery in the wholesale and retail sector will be one of the main drivers of estimated domestic economic growth of 3.5% this year, the Bank of Namibia (BoN) said yesterday.
According to the BoN’s latest estimates, wholesale and retail will grow by 8.6% this year, compared to 5.8% in 2023.
Last year, overall economic growth was 4.2%.
Releasing its latest Economic Outlook Update, the central bank said the slower growth this year could be attributed to a weak performance in the primary industry, mainly on account of anticipated contractions for diamond mining and crop farming sub-sectors.
“Nevertheless, the 2024 growth estimate was upgraded to 3.5% from the 3.1% published in the August 2024 Economic Outlook.
“Significant increases in 2024 growth estimates were noted for metal ores (gold), livestock farming, health, information and communication, wholesale and retail trade, as well as taxes on products,” the BoN said.
Consumer, manufacturing
According to the BoN, the reduction in interest rates, slowing inflation and adjusted personal income tax brackets is stimulating household consumption.
“The 2024 growth estimate for this sector was upgraded by 1.1 percentage points compared to the similar growth rate published in the August 2024 Economic Outlook. The revision was based on the sector's observed year-to-date performance,” the central bank said.
The manufacturing sector is also displaying promising signs of a robust recovery after a challenging contraction in 2023.
The BoN expects the sector to grow by 3.0% this year, with further acceleration to 3.5% in 2025, following a 3.2% contraction last year.
The recovery is largely driven by a rebound in the beverages subsector, alongside improved growth in meat processing and grain milling.
Beverage production, in particular, has seen a notable surge, attributed to increased output of soft drinks, primarily catering to the domestic market, the BoN says.
Additionally, the grain mill products subsector is expected to perform well, with growth projections of 11.1% this year and 5.7% in 2025, up from 4.3% growth in 2023.
Agriculture
The agriculture, forestry and fishing sectors in Namibia are forecasted to face another challenging year in 2024, following a contraction of 3.4% last year.
BoN projections indicate a further decline of 3.3% this year before a recovery to a growth rate of 2.6% in 2025.
This poor growth outlook is largely attributed to the devastating impact of crop failures caused by severe drought conditions experienced across all production sub-categories during the 2024/2025 planting season.
Looking ahead to 2025, crop production activities are expected to rebound, bolstered by anticipated La Niña-induced rainfall, which is forecast to aid in the sector's recovery. According to the Columbia Climate School, the probability of La Niña occurrences is projected at over 60% by the end of 2024 and the beginning of 2025, the BoN said.
According to the BoN’s latest estimates, wholesale and retail will grow by 8.6% this year, compared to 5.8% in 2023.
Last year, overall economic growth was 4.2%.
Releasing its latest Economic Outlook Update, the central bank said the slower growth this year could be attributed to a weak performance in the primary industry, mainly on account of anticipated contractions for diamond mining and crop farming sub-sectors.
“Nevertheless, the 2024 growth estimate was upgraded to 3.5% from the 3.1% published in the August 2024 Economic Outlook.
“Significant increases in 2024 growth estimates were noted for metal ores (gold), livestock farming, health, information and communication, wholesale and retail trade, as well as taxes on products,” the BoN said.
Consumer, manufacturing
According to the BoN, the reduction in interest rates, slowing inflation and adjusted personal income tax brackets is stimulating household consumption.
“The 2024 growth estimate for this sector was upgraded by 1.1 percentage points compared to the similar growth rate published in the August 2024 Economic Outlook. The revision was based on the sector's observed year-to-date performance,” the central bank said.
The manufacturing sector is also displaying promising signs of a robust recovery after a challenging contraction in 2023.
The BoN expects the sector to grow by 3.0% this year, with further acceleration to 3.5% in 2025, following a 3.2% contraction last year.
The recovery is largely driven by a rebound in the beverages subsector, alongside improved growth in meat processing and grain milling.
Beverage production, in particular, has seen a notable surge, attributed to increased output of soft drinks, primarily catering to the domestic market, the BoN says.
Additionally, the grain mill products subsector is expected to perform well, with growth projections of 11.1% this year and 5.7% in 2025, up from 4.3% growth in 2023.
Agriculture
The agriculture, forestry and fishing sectors in Namibia are forecasted to face another challenging year in 2024, following a contraction of 3.4% last year.
BoN projections indicate a further decline of 3.3% this year before a recovery to a growth rate of 2.6% in 2025.
This poor growth outlook is largely attributed to the devastating impact of crop failures caused by severe drought conditions experienced across all production sub-categories during the 2024/2025 planting season.
Looking ahead to 2025, crop production activities are expected to rebound, bolstered by anticipated La Niña-induced rainfall, which is forecast to aid in the sector's recovery. According to the Columbia Climate School, the probability of La Niña occurrences is projected at over 60% by the end of 2024 and the beginning of 2025, the BoN said.
