Bank of Namibia


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Media Release Monetary Policy Statement
16 August 2023 | Media Release


On the 14th and 15th of August 2023, the Monetary Policy Committee (MPC) of the Bank of Namibia held its bi-monthly meeting to decide on the appropriate monetary policy stance to be implemented over the next two months. To continue safeguarding the peg between the Namibia Dollar and the South African Rand and supporting the domestic economy, the MPC decided to keep the Repo rate unchanged at 7.75 percent. This decision was taken following a comprehensive review of global, regional and domestic economic developments.


Namibia’s real GDP growth picked up during the first quarter of 2023 and remained robust year-to-date. Inflation pressures softened in July 2023, while Private Sector Credit Extension (PSCE) growth remained weak. The merchandise trade deficit narrowed, and the stock of international reserves remained sufficient to support the currency peg and meet the country’s international financial obligations.

1. The recently released quarterly national accounts data indicate that the Namibian economy grew by 5.0 percent during the first quarter of 2023, higher than the 2.1 percent in the final quarter of 2022. The improved growth was widely spread across the various sectors of the economy. Similarly, year-to-date, the Namibian economy continued with its positive momentum as reflected in increased activity in the mining, livestock marketing, wholesale and retail trade, communication and tourism sectors. Going forward, however, real GDP growth is projected to slow down to about 3.3 percent for 2023 as a whole compared to 4.6 percent registered in 2022, on account of slower growth in the primary industry.

2. Risks to the domestic economic outlook, emanating from both external and internal factors, remained broadly unchanged. External factors include weakening global economic activity, tighter global monetary policy, elevated crude oil prices and continued geopolitical tensions. Internal risks include the current drought, uncertain rainfall conditions, water supply interruptions, particularly at the coastal towns and general infrastructure constraints.

3. Namibia’s average inflation rate rose to 6.2 percent during the first seven months of 2023 relative to 5.3 percent during the corresponding period in 2022. The rise in the average consumer prices continued to be predominantly driven by food and housing price inflation. Nevertheless, on a monthly basis, annual inflation declined to 4.5 percent in July 2023 from 5.3 percent in June 2023. The projection for overall inflation has been revised downwards and it is now expected to average 5.6 percent in 2023, 0.4 percentage point lower compared to the forecast at the previous MPC meeting. The revision was mainly on the back of more-than-anticipated deflation in the transport category.

4. The annual growth in PSCE improved to 3.0 percent in June 2023 from 2.6 percent in April 2023, albeit remaining lower by historical standards. The rise in PSCE growth was attributed to an increase in the demand for credit by the household sector, especially in the categories of mortgage and instalment sale and leasing credit. Demand for credit by businesses, however, contracted since the last MPC meeting, mainly driven by repayments across most business credit categories.

5. On the external sector, Namibia’s merchandise trade deficit narrowed by 18.6 percent to N$15.4 billion over the first half of 2023 compared to the same period in 2022, as exports rose faster than imports. The rise in export earnings was reflected in uranium, diamonds, gold and fish exports due to increased volumes as well as the depreciation of the Namibia Dollar/Rand exchange rate.

6. As at the 31st of July 2023, the stock of international reserves stood higher at N$54.2 billion compared to N$53.0 billion recorded at the end of June 2023 and N$49.7 billion reported at the last MPC meeting. The increase in the official reserves was predominantly due to higher SACU receipts, export earnings from diamonds and the weaker exchange rate. At this level, the stock of international reserves is estimated to cover 5.7 months of imports. The stock of international reserves remains sufficient to support the currency peg between the Namibia Dollar and the South African Rand and meet the country’s international financial obligations.

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