STAFF WRITER
Namibia will experience an economic slow down to 3.5% this year as a result of pressure experienced by local diamonds from lab grown precious stones.
The economy will however regain momentum in 2026 , the latest economic outlook released by the Bank of Namibia on Monday shows.
The central bank said real Gross Domestic Product (GDP) is expected to moderate to 3.5% in 2025, slightly below the 3.7 percent for 2024.
“The deceleration is mainly attributed to a contraction in primary industries, particularly the livestock subsector, stemming from reduced herd sizes, which continues to be impacted by the drought conditions experienced in 2024. Additionally, the diamond mining sector is expected to continue its declining path, reflecting weak global demand coupled with headwinds from the imposition of trade tariffs and rising competition from lab-grown alternatives,” the apex bank’s Director of Communications and International Relations Kazembire Zeburuka said in a statement on Monday..
He said the manufacturing sector is also set to weigh negatively on growth, with notable contractions anticipated in meat processing and basic non-ferrous metals.
“ Growth is, however, estimated to recover to 3.9 percent in 2026, supported by a rebound in agriculture, continued strength in construction, and improved output in uranium and metal ores.
The latest growth projections for 2025 and 2026 have been revised downward by 0.3 and 0.1 percentage points, respectively, compared to estimates in the April 2025 Economic Outlook update,”” he said.
Zemburuka said downside risks remain for the domestic economy in relation to a reduction in diamond export earnings, driven by price pressures and the rise of lab-grown alternatives, which pose a significant threat.
“Furthermore, potential trade disruptions stem from protectionist trade policies and inflationary pressures arising from ongoing global conflicts. The combined effects of declining SACU and diamond revenues could lead to rising debt sustainability risks, potentially necessitating expenditure rationing to restore fiscal space.” he said.
Despite the slow down in growth experienced in Namibia the Sub-Saharan African (SSA) region is expected to experience steady economic growth during 2025.
This is followed by an improvement in 2026.
“Economic growth within the SSA region is estimated at 4.0 percent in 2025, unchanged from 2024, before rising to 4.3 percent in 2026. The stable growth for 2025 is mainly attributed to the impact of a combination of positive and negative factors. Lower global oil prices represent a positive factor for most of the SSA economies, while protectionist trade policies constitute a negative factor for the region,” the central bank said.
Bank of Namibia said the latest forecast for 2025 reflects an upward revision by 0.2 percentage points from the corresponding projection contained in the April 2025 WEO. This adjustment was mostly due to an improved growth outlook for Nigeria.
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