Namibia Trims Key Policy Rate to 7%

Namibia's central bank cut its key lending rate by 25 bps to 7% during its two-day meeting concluding on December 4, 2024, marking the third consecutive rate reduction to support the economy and maintain the Namibia Dollar's peg to the South African Rand.

The Committee noted that inflation trends had moderated recently and expressed optimism about the medium-term inflation outlook, though it acknowledged ongoing risks.

Namibia's annual inflation rate eased to 3% in October 2024, the lowest since February 2021.

Looking ahead, the medium-term inflation projections remain unchanged from the previous MPC meeting, with forecasts of 4.3% for 2024 and 4.0% for 2025.

The central bank also noted that domestic economic activity strengthened in the first ten months of 2024.

As a result, the GDP growth forecast for 2024 was revised up to 3.5%, a 0.4 percentage point increase, driven by better performance in sectors like gold mining.

The 2025 growth forecast was also slightly raised to 4.0%.