IMF Staff Completes 2022 Article IV Mission to Namibia
IMF News, October 5, 2022
Source details
- Canonical URL
- IMF Staff Completes 2022 Article IV Mission to Namibia
Other formats
Bibliographic details
- Published: October 5, 2022
Mission overview
- IMF staff team led by Ms. Giorgia Albertin, IMF mission chief for Namibia, held a virtual mission during September 20 ‒ October 5, 2022, to conduct the 2022 Article IV Consultation discussions with Namibia.
- End-of-mission press release conveys preliminary findings of the IMF staff team; views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
- Press Release No. 22/334; press statement issued October 5, 2022.
Economic outlook and projections
- After a sharp contraction due to the COVID-19 pandemic, the Namibian economy has started to recover.
- Real GDP growth reached 2.7 percent in 2021 as mining activity rebounded, and tertiary sector activities began to recover.
- The recovery strengthened in the first half of 2022, supported by sustained mining growth and stronger manufacturing activity.
- Real GDP growth is expected at 3 percent in 2022 and 3.2 percent in 2023, supported by robust diamond, gold and uranium production, and rebounding tourism.
- Average headline inflation rose to 5.6 percent in August 2022, reflecting rising food and transport prices.
- Average inflation would rise to 6.4 percent in 2022 and start to moderate in 2023.
- The current account deficit would remain large, financed by FDI inflows in oil and gas and one-off transactions.
- The fiscal deficit is expected to narrow, supported by strengthened tax revenues and fiscal consolidation measures.
- No new COVID-19 cases were recently reported (as of the mission statement).
Risks and scenarios
- Spillovers from the war in Ukraine, a slowdown of the global economy and weaker non-oil commodity prices could:
- further exacerbate inflation,
- worsen imbalances, and
- undermine the recovery.
Fiscal policy and debt sustainability
- Advancing the authorities’ fiscal consolidation strategy is crucial to preserve debt sustainability.
- Key fiscal policy priorities:
- Containing the wage bill.
- Advancing the reform of state-owned enterprises.
- Strengthening tax administration.
- Complementary priorities:
- Preserve social spending and growth-supporting public investment.
- Mitigate the impact of higher food and fuel prices on the poorest.
- Strengthen the public financial framework to support fiscal consolidation.
Monetary policy and financial stability
- The Central Bank of Namibia has gradually raised its policy rate, following the South African Reserve Bank’s (SARB) monetary policy tightening.
- As inflationary pressures rise:
- Maintaining the policy rate broadly aligned with the SARB’s rate and an adequate level of reserves will support the currency peg and anchor inflation.
- Strengthening the resilience of the financial sector and managing macro-financial risks will support financial stability.
Structural reforms and inclusive growth
- Preserving macroeconomic stability, advancing structural reforms and protecting the most vulnerable is key to:
- foster private sector-led and inclusive growth,
- reduce unemployment and inequality.
- Structural reform priorities:
- Improve the business climate.
- Foster access to finance.
- Strengthen governance.
- Reduce skills mismatches.
Key statistics and dates
- September 20 ‒ October 5, 2022: dates of the virtual Article IV mission.
- Press Release No. 22/334; issued October 5, 2022.
- Real GDP growth: 2.7 percent in 2021.
- Real GDP growth projections: 3 percent in 2022; 3.2 percent in 2023.
- Average headline inflation: 5.6 percent in August 2022.
- Average inflation projection: 6.4 percent in 2022.
- Contact listed: PRESS OFFICER: Tatiana Mossot; Phone: +1 202 623-7100; Email: MEDIA@IMF.org.
IMF Staff Completes 2022 Article IV Mission to Namibia, Press Release No. 22/334, October 5, 2022.