Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

After years of robust growth, the Namibian economy entered into recession in 2019 and 2020, impacted by the dissipation of temporary stimuli, a drop in raw material prices, a severe drought and then the Covid-19 pandemic. The economy returned to growth in 2021 (2.7%) and 2022 (3%) supported by robust diamond, gold, and uranium production and a gradual recovery in tourism and manufacturing. The gradual economic recovery is expected to continue in 2023, with the IMF projecting growth at 3.2%.

Namibia has experienced a period of exceptional growth masking increasing macroeconomic imbalances, a slowdown in productivity and a decline in external competitiveness. Nevertheless, fiscal imbalances are expected to narrow, supported by fiscal consolidation measures to mobilize additional tax revenues and increase spending efficiency. Fitch Ratings forecasts the FY22/23 fiscal deficit to be 7.1% of GDP, down from 8.5% in the preceding fiscal year, while the FY 2023/24 budget foresees a primary surplus. The country’s debt-to-GDP ratio stood at an estimated 71.8% in 2022 and is expected to remain stable over the forecast horizon. To reduce the risk associated with indebtedness, the authorities are attempting to diversify their sources of financing (Coface). The exchange risk remains limited because the debt is mainly domestic, issued on long-term maturities and denominated in local currency. Meanwhile, a weakened exchange rate and high oil prices have led to continued increases in transport, housing and food prices, with inflation reaching 6.4% in 2022. The Bank of Namibia increased its policy rate by 50bp to 6.75% in November in an effort to contrast inflation, which is forecasted to gradually ease to 4.9% this year and 4.5% in 2024. The government's priorities are to support recovery and economic growth, to ensure the sustainability of public finances and debt through fiscal consolidation, to reform the tax system and to implement structural policy reforms, while also redistributing wealth and maintaining a favourable business environment.

Namibia is one of the countries with the highest inequalities: the country more than halved the poverty rate between 1993 and 2016, but poverty incidence remains relatively high for an upper-middle-income country. According to the World Bank, the incidence of poverty stood around 64% as of 2021 and around 15% of the adult population is infected with the AIDS virus. Unemployment is high and affected 21.3% of the population in 2021 (World Bank, latest data available), with a notable disparity between rural and urban areas, as well as among women and young people. Overall, the country’s GDP per capita (PPP) was estimated at USD 10,791 in 2022 by the IMF.

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