Namibia to accelerate budget reforms as Middle East tensions weigh on outlook

Namibia will accelerate budget reforms as escalating tensions in the Middle East add pressure to inflation, trade costs and economic growth, Prime Minister Elijah Ngurare said Monday.

Speaking at the opening of the 2026/2027 budget reform roll-out workshop in Windhoek, Ngurare said the worsening global environment is already contributing to higher fuel and food prices, rising shipping costs and weaker external demand, News.az reports, citing Xinhua.

"For Namibia, this has three important implications: higher imported inflation through fuel and food prices; increased pressure on trade and the external position through higher shipping and import costs; and weaker growth prospects through softer external demand and tighter financial conditions," he said.

Ngurare said the developments underscore the need for greater policy discipline, resilience and reform to safeguard macroeconomic stability.

Namibia's 2026/2027 national budget, totaling 87.9 billion Namibian dollars (about 5 billion U.S. dollars), was tabled earlier this year under more favorable global conditions.

However, the external environment has since deteriorated, requiring stronger implementation of fiscal reforms, he said.

The government aims to reduce the fiscal deficit from 5.5 percent of gross domestic product in 2026/2027 to 3.3 percent by 2028/2029 as part of efforts to restore fiscal space and stabilize public finances, Ngurare said, calling for stricter expenditure control and improved efficiency across government.

Ngurare stressed that fiscal consolidation and development should be pursued simultaneously, noting that protecting productive public investment remains essential for supporting growth and expanding the future revenue base.

News.Az 

By Faig Mahmudov