WINDHOEK, Aug. 8 (Xinhua) -- Namibia's economic growth is set to decelerate in 2024, with real gross domestic product growth projected to drop to 3.1 percent this year, down from the 4.2 percent recorded in 2023.
The slowdown is largely attributed to a subdued global economy, weakening demand for Namibia's mineral exports, and the ongoing drought conditions affecting the country, the Bank of Namibia said in its August economic outlook report on Thursday.
The global economic environment remains challenging, with tight monetary policies being maintained by major central banks, the bank said.
These conditions are expected to continue suppressing consumer spending and overall demand, further impacting Namibia's economic prospects, while high base effects from the mining sector, which performed strongly in 2023, are also expected to exert downward pressure on growth in 2024.
According to the country's central bank, the ongoing drought is likely to hamper agricultural production throughout the year, while strained water resources could limit uranium output.
"Other domestic risks include water supply interruptions that continue to affect mining production at the coast, potential spillover of electricity cuts in South Africa to Namibia, and the legacy of El Nino, which is harming crop production in southern Africa," the bank said.
The mining sector, a key driver of Namibia's economy, faces additional threats from weakening global commodity demand and increasing competition from lab-grown diamonds.
The prolonged conflict between Russia and Ukraine continues to drive up prices of essential commodities such as fuel, wheat, and cooking oil, of which Namibia is a net importer, the bank added.
