Monetary Policy Statement 18 June 2025
18 June 2025 | Media Release
REPO RATE MAINTAINED AT 6.75 PERCENT
On the 16th and 17th of June 2025, the Monetary Policy Committee (MPC) of the Bank of Namibia held its third bi-monthly meeting of the year to decide on the appropriate monetary policy stance for the next two months. To continue safeguarding the peg between the Namibia Dollar and the South African Rand, while supporting the domestic economy, the MPC unanimously decided to keep the Repo rate unchanged at 6.75 percent. This decision followed a comprehensive review of current and projected domestic, regional and global economic developments.
RECENT ECONOMIC DEVELOPMENTS
Domestic economic activity expanded year-to-date, although at a slower pace relative to the same period a year ago. Domestic inflation is well-contained. Annual growth in Private Sector Credit Extension (PSCE) continued with an uptick trend but remains still subdued. The merchandise trade deficit improved somewhat but remained high, while the stock of international reserves continued to be sufficient to maintain the currency peg and meet the country’s international financial obligations.
1. Domestic economic activity expanded during the first four months of 2025, albeit at a slower pace compared to the corresponding period in 2024. This expansion was primarily sustained by the mining, tourism, wholesale and retail trade, transport, and communication sectors. Meanwhile, the construction and agriculture sectors as well as the diamond mining subsector remained weak.
2. Looking ahead, real GDP growth is projected to marginally improve from an estimated 3.7 percent in 2024 to 3.8 percent in 2025 and 4.0 percent in 2026. This outlook, however, is susceptible to some key downside risks, including tariff restrictions, prolonged multilateral policy uncertainty and depressed international diamond prices. Additionally, escalating geopolitical tensions, including the recent Israel-Iran conflict, could significantly weigh on growth. Domestically, water supply interruptions, especially in coastal towns, and animal disease outbreaks as well as slow development budget execution may continue to pose downside risks to growth.