The central bank has commented on Namibia’s economy slowing in the second quarter of 2025, held back by weak performances in manufacturing, fishing, and agriculture. A report from the Bank of Namibia show that the economy grew by 1.6% in real terms, down from 3.3% in the same period last year and 2.8% in the first quarter of this year. In nominal terms, the size of the economy was estimated at N$64.8 billion, compared to N$58.8 billion a year ago.
Naufiku Hamunime, acting deputy director for corporate communications and sustainability at the Bank of Namibia, stated the main drag came from agriculture, fishing and fish processing, while manufacturing recorded sharp declines, especially in copper and diamond cutting. Mining was the exception, with uranium driving growth. Construction and utilities also performed well, while trade, education and finance lifted the services sector.
“The economy continues to show resilience despite sector-specific challenges. Mining, construction and services helped soften the blow from weaker agricultural and manufacturing activity,” she said.
Inflation slowed to 3.6% in the second quarter, down from 3.7% in the first quarter. The drop was mainly due to lower transport costs, especially for vehicles and fuel. Food and housing, however, became slightly more expensive. By August, inflation had eased further to 3.2% from 3.5% in July.
Hamunime pointed out the moderation in inflation has created a more supportive environment for households and businesses and was also being reflected in stronger demand for credit.
Growth in the money supply slowed to 7.6% from 10.1% in the first quarter. This was due to weaker growth in both foreign assets and domestic claims. Private sector credit, however, picked up to 5.7%, driven by higher demand in the real estate sector.
Government debt stood at N$171.4 billion at the end of June, up 8.8% from a year earlier. This represents 61.7% of GDP, slightly down from 62.7% last year.
The Bank of Namibia stated the debt stock is expected to fall temporarily in October when government repays a US$750 million Eurobond, but it will rise again to an estimated N$172.4 billion by the end of the 2025/26 financial year.
Loan guarantees dropped to 3% of GDP, well below the 10% ceiling.
The country’s external position improved, with the current account deficit narrowing to N$5.4 billion, thanks to stronger uranium and gold exports and lower outflows in services.
Foreign reserves stood at N$59.6 billion at the end of June, equal to 3.9 months of import cover, before falling to N$57 billion by August.
“While reserves have declined slightly, they remain at healthy levels and continue to provide the country with enough buffer against external pressures,” Hamunime noted.
However, the Namibia dollar appreciated by 3.1% in real terms against major currencies, slightly hurting the competitiveness of local exports.