The Namibian economy is projected to grow by 3.5% in 2025, a slight slowdown from the 3.7% estimated for 2024.

In a statement, Bank of Namibia's Director of Strategic Communications and International Relations, Kazembire Zemburuka, said the deceleration is mainly due to a contraction in primary industries, particularly the livestock subsector, as herd sizes remain low following drought conditions in 2024.

Diamond mining is also expected to continue declining, reflecting weak global demand, the imposition of trade tariffs, and competition from lab-grown alternatives.

The manufacturing sector is anticipated to weigh on growth as well, with notable contractions in meat processing and basic non-ferrous metals.

However, the bank forecasts a rebound in 2026, with real Gross Domestic Product growth estimated at 3.9%, driven by recovery in agriculture, sustained activity in construction, and improved output in uranium and other metal ores.

Globally, economic growth is expected to slow down to 3% in 2025 from 3.3% in 2024 before edging up to 3% in 2026.

The central bank warned that domestic risks include a further fall in diamond export earnings, trade disruptions linked to protectionism, and inflationary pressures from ongoing global conflicts.

A decline in revenues from the Southern African Customs Union (SACU) combined with reduced diamond income could heighten debt sustainability concerns and force expenditure cuts to restore fiscal space.