Bank of Namibia Governor Ebson Uanguta says the country's economic recovery faces increased pressure from foot-and-mouth disease, rising fuel costs and a widening trade deficit.

This is despite projections of economic growth of 2.1% this year.

However, inflation is accelerating and could further squeeze households and businesses.

The Bank of Namibia expects agriculture and manufacturing to support a gradual recovery, with economic growth projected to exceed previous forescasts.

However, the outbreak of Foot-and-Mouth Disease (FMD) has emerged as a key risk to the outlook, alongside weaker global economic prospects and the possibility of El Niño conditions.

"The Namibian economy is expected to remain under pressure as previously identified risk materialised. Nevertheless, growth is still anticipated to improve from 1.7%, as recorded in 2025, to around 2.1% and 2.8% in 2026 and 2027, respectively."

The country's external trade position has also deteriorated, the central bank warns.

Namibia recorded a merchandise trade deficit of N$33.5 billion in the first eight months of 2026, compared with N$17.8 billion during the same period last year.

Higher imports, particularly mineral fuels, contributed to the widening gap.

Governor Uanguta says private sector credit growth, meanwhile, accelerated to 5.4% in August, an indication of increased borrowing.

"This is reflecting a higher credit uptake by both businesses and households. Nevertheless, credit growth eased on average during the first eight months of 2026 compared to the corresponding period of last year."

Much to some relief, the international reserves rose to N$59.3 billion at the end of September 2026, which Uangua says is providing an estimated three-to-six months of import cover.