Presenting the 2023-2024 National Budget, the Minister for Finance and Public Enterprises Iipumbu Shiimi stated that Namibia’s economic growth accelerated last year more than initially anticipated. The upwards growth figures for the domestic economy to 4% in 2022, against revised estimates of 2.8% published in the FY2022/23 Mid-Year Budget Review
Presenting the 2023-2024 National Budget, the Minister for Finance and Public Enterprises Iipumbu Shiimi stated that Namibia’s economic growth accelerated last year more than initially anticipated. The upwards growth figures for the domestic economy to 4% in 2022, against revised estimates of 2.8% published in the FY2022/23 Mid-Year Budget Review. The stronger growth reflects a higher-than-expected outturn for most key indicators in the preliminary data. The slowdown in international fuel prices over the last half of 2022, despite the ongoing geopolitical tensions, has also served as a boost to economic activities in most sectors, said the minister.
The N$84.6-billion National Budget for the 2023/24 financial year, increased by 9.7% compared to the N$61.1 billion for last year, which is inclusive of N$2 billion in development projects funded outside the State Revenue Fund and N$10 billion in debt servicing costs.
In 2023, forecasts growth to moderate to 3.2%, reflecting revised mining production estimates, before slowing further to 2.2% in 2024. In this regard, growth is expected to be anchored by activities in the mining sector and tertiary industries as well as recovery in most sectors of the secondary industries. In the near term, there are still downside risks to the domestic economy. As such, it is imperative to continue with ongoing policy efforts to maintain fiscal sustainability through anchoring market expectations and containing sovereign borrowing costs. At the same time, it is critical to driving the necessary reforms to enable broad-based economic expansion in key sectors, especially those with significant potential for employment creation such as agriculture, tourism, and services stated by the minister.
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With regard to inflation, Shiimi said the domestic prices still remain on the high side, although there are indications of probable moderation in the near term. The annual inflation rate increased to an average of 6.1 percent during 2022 in contrast to 3.6 percent in 2021. The recent data prints for January 2023 point to an annual inflation rate of 7.0 percent, implying persistent price pressures on already constrained businesses and households.
