Domestic inflation is expected to track upward over the medium term, driven by sustained global tensions and pressure on supply chains, according to the latest economic projections.
The Bank of Namibia (BoN) revealed this on Wednesday during the Monetary Policy Announcement, which stated that the repo rate will remain unchanged at 6.75%.
According to the central bank, inflation is expected to rise from 3.5% in 2025 to 4% in 2026, then slow to 3.9% in 2027.
“The 2027 projection is 0.3 percentage point above the previous forecast, underpinned by the assumption of protracted geopolitical tensions in the Middle East,” the BoN noted.
According to the central bank, domestic economic activity moderated during the first half of 2026 relative to the corresponding period in 2025.
“Available high-frequency indicators suggest broad-based sluggish economic performance, especially in the mining, manufacturing, electricity generation, and transport sectors,” the BoN noted.
Meanwhile, improved economic activity was noted in the agriculture and wholesale and retail trade sectors.
Looking ahead, the growth outlook has been revised downward, with growth now forecast to recover from 1.7% in 2025 to 2.1% in 2026, 0.5 percentage point below the previous projections.
“The downward revision largely reflects contractions in the primary industries, alongside moderations in the secondary and tertiary industries. Downside risks to the outlook remain slower global growth, the Foot and Mouth Disease outbreak in neighbouring countries, and potential El Niño conditions,” the BoN concluded.
