Namibia's economy is expected to grow by 2.1% this year before strengthening to 2.8% in 2027.
The Bank of Namibia says the recovery will be supported by improved agricultural output, strong uranium mining and continued growth in wholesale and retail trade and construction.
However, the outlook remains affected by challenges in the mining sector and rising global economic risks.
The Bank of Namibia has revised Namibia's economic growth forecast for 2026 down by 0.5% percentage points from its March forecast.
The economy grew by 1.7% last year and is expected to expand by 2.1% this year, before accelerating to 2.8% next year.
The central bank says the expected recovery this year will be supported by a rebound in agriculture, following improved early-season rainfall.
Uranium mining is also expected to remain strong, while wholesale and retail trade and construction are projected to continue supporting economic activity.
However, the diamond mining sector and metal ores continue to face significant contractions.
The Bank says the deeper-than-expected decline in diamond mining, together with weaker construction activity, has outweighed the improved outlook for agriculture.
The prolonged conflict in the Middle East is also adding pressure to the domestic economy through higher input costs, particularly fuel, shortages of some imported inputs and increased transportation and logistics costs.
Regionally, economic growth in Sub-Saharan Africa is expected to slow from 4.5% last year to 4.3% this year, before improving to 4.5% next year.
Namibia's economic outlook remains exposed to several risks.
These include the spread of Foot-and-Mouth Disease (FMD) in neighbouring Botswana and South Africa, which could affect livestock production and export earnings.
Global geopolitical tensions and changing United States policies could also create volatility in commodity prices, exchange rates and the cost of imported goods such as fuel.
Despite these challenges, the bank expects Namibia's economic growth to strengthen gradually over the next two years.