Domestic growth outlook lowered to 2.1% for 2026 …policy reforms critical for ensuring sustainable growth

Domestic economic recovery is losing momentum, as the Bank of Namibia’s (BoN’s) latest 2026 outlook revises the country’s growth forecast to 2.1%. The latest 2026 projection is a 0.5 percentage point downward revision from the central bank’s March outlook, highlighting the growing pressure on the domestic economy.

This is as pressure builds from a prolonged Middle East conflict, weaker diamond production, softer construction activity and rising input costs, all of which continue to weigh heavily on economic activity.

The central bank’s August 2026 Economic Outlook, released yesterday, projects real gross domestic product (GDP) growth of 2.1% this year, up from the weak 1.7% recorded in 2025, and strengthening to 2.8% in 2027.

The Bank stated that the downgrade reflects a deeper-than-expected contraction in diamond mining and weaker construction activity, which have more than offset improved agricultural prospects.

The prolonged conflict in the Middle East has added another layer of vulnerability, particularly through higher fuel and other input costs, shortages of imported inputs such as sulphur, and deteriorating transport and logistics conditions.