The domestic economy is expected to recover to a growth rate of 2.7% in 2021, from a deep contraction of 7.3 % in 2020, the Bank of Namibia said in their Economic Outlook update for February.
According to the central bank the domestic economy is projected to grow by 2.7% and 3.3% in 2021 and 2022.
These improvements are attributed to broad based base effects as well as better growth prospects for diamond mining, agriculture and transport sectors from 2021 onwards.
The latest growth projection for 2021 represents an upward revision when compared to the December 2020 Economic Outlook update, largely due to better growth prospects in primary industries. The latest overall growth estimate of 2.7% for 2021 represents a slight improvement from 2.6% published in the December 2020 Economic Outlook update.
Information obtained from the latest consultations with industries indicated that growth is likely to be broad based.
Meanwhile, according to the BoN risks to domestic growth remain dominated by the impact of the COVID-19 pandemic on the domestic economy, mainly regarding the success of vaccinations in Namibia and around the globe.
Travel restrictions are still in place in many countries, exacerbated by the second wave of coronavirus infections. Other notable risks to the domestic growth outlook include the persistently low international prices for some of Namibia’s export commodities such as uranium, as well as climatic swings. Namibia is prone to floods in the northern parts of the country, which are likely to occur in 2021, following good rainfalls received.