Standard Bank has revised its forecast for Namibia's real economic growth in 2026 to 2.2%-2.9%, up from its initial forecast of 1.2%. This upgrade is attributed to stronger-than-expected growth in the second quarter and an upward revision to first-quarter growth. The bank's economist, Helena Mboti, stated that the stronger second-quarter performance and revised first-quarter figures have shifted the bank's outlook towards growth broadly in line with 2025.
According to the Namibia Statistics Agency (NSA), economic activity accelerated to 4.8% year-on-year in the second quarter of 2026, up from a revised 3.1% in the first quarter. This growth rate is significantly higher than the 1.7% recorded in the second quarter of 2025. The NSA also reported that the tertiary sector remained the main anchor of growth, expanding by 6.1% year-on-year in the second quarter, compared with 3.8% a year earlier.
The strong growth in the tertiary sector was driven by various industries, including wholesale and retail trade, which grew by 9.0%, agriculture, which grew by 17.8%, and health activity, which increased by 17.6%. These sectors contributed 0.9 percentage points, 0.8 percentage points, and 0.7 percentage points to overall growth, respectively. The growth in these sectors is a positive sign for the Namibian economy.
Gross Fixed Capital Formation (GFCF) also strengthened, increasing by 14.4% year-on-year in the second quarter, compared with a contraction of 4.4% in the same period of 2025 and growth of 3.4% in the first quarter of 2026. Standard Bank noted that the increase was driven primarily by machinery and transport equipment. Stronger capital formation and project activity can have a positive impact on procurement and household income.
Despite the positive growth trends, the economy continued to face structural weaknesses. The mining sector contracted by 3.1%, construction by 15.5%, and electricity and water by 2.6%. These sectors subtracted 0.3 percentage points, 0.2 percentage points, and 0.1 percentage points, respectively, from overall growth. The 4.8% year-on-year growth rate was also partly supported by favourable base effects.
The near-term outlook for the Namibian economy has improved, but the sustainability of the growth will depend on the domestic transmission of investment spending and the resilience of agriculture to climate shocks. Higher inflation and interest rates, together with rising global oil prices, could weigh on consumption and increase the import bill during the second half of 2026. This could potentially push growth towards the lower end of the bank's forecast range.
Looking ahead, Standard Bank warned that agricultural momentum could weaken into 2027 as El Niño intensifies. Further delays in final investment decisions or a slowdown in foreign investment-related spending could also weaken domestic economic activity. The bank's revised forecast takes into account the stronger-than-expected growth in the second quarter and the upward revision to first-quarter growth.
Key points
- Standard Bank raises 2026 growth forecast for Namibia to 2.2%-2.9%.
- Namibia's economy grew by 4.8% year-on-year in the second quarter of 2026.
- The tertiary sector remains the main anchor of growth, expanding by 6.1% year-on-year in the second quarter.
