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Namibia’s economy is expected to slow in 2025, with GDP growth projected at 3.0% due to contractions in manufacturing, agriculture, and diamond production, compounded by drought and weak global demand. However, the tertiary sector remains resilient, and a moderate recovery is forecast for 2026–2027, supported by improved rainfall, construction, electricity, and uranium mining, though downside risks from declining exports and fiscal pressures persist.
Namibia’s economy is projected to expand at a slower pace in 2025, with real GDP growth expected to ease to 3.0%, down from an estimated 3.7% in 2024, according to the Bank of Namibia’s December 2025 Economic Outlook Update. The central bank highlighted that the weaker growth outlook is primarily driven by underperformance in several key sectors, particularly a contraction in manufacturing and continued softness in primary industries. Drought-related agricultural losses and declining diamond production remain major constraints on economic activity. In addition, persistent drought conditions and weak global demand are significant contributors to the subdued growth prospects.
The manufacturing sector is forecast to shrink by 4.6% in 2025, reversing a 2.8% expansion in 2024. This decline is largely attributed to sharp drops in basic non-ferrous metals, meat processing, and diamond processing. Output of basic non-ferrous metals is expected to plunge by 58.5%, reflecting lower copper processing volumes and subdued international demand. Meat processing is projected to decline by 26.5%, as farmers focus on rebuilding livestock herds after substantial destocking during the 2024 drought.
Primary industries are also anticipated to face continued pressures. The agriculture, forestry, and fishing sector is projected to contract by 4.2% in 2025, following a 2.7% contraction in 2024. Livestock farming is expected to drop sharply by 22.5% due to reduced herd sizes and limited feed availability, while the fishing subsector may decline by 4.7%, driven by persistently lower catch volumes.
Despite these near-term challenges, the Bank of Namibia forecasts a moderate economic recovery in the medium term, with growth projected to rise to 3.8% in 2026 and 4.3% in 2027. The recovery is expected to be supported by improved rainfall, stronger performance in construction and electricity generation, and higher uranium output. “Growth is projected to recover to 3.8% in 2026 and further to 4.3% in 2027, supported by improvements in agriculture, construction, electricity generation, and uranium mining,” the report stated.
Meanwhile, the tertiary sector is expected to remain resilient, with overall growth of 4.5% in 2025. Wholesale and retail trade is projected to expand by 6.2%, bolstered by activity in construction, mining supply chains, and oil and gas exploration. Transport and storage are expected to grow by 4.2%, public administration by 3.7%, and the health sector by 5.6%.
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However, the Bank cautioned that the outlook carries significant downside risks. Factors such as declining diamond export earnings, rising global protectionism, and inflationary pressures linked to geopolitical tensions could dampen demand for Namibian exports. The report also warned that falling SACU and diamond revenues could strain debt sustainability, potentially requiring fiscal tightening to maintain economic stability.