Interest rate cuts expected next month
Financial advisory firm Simonis Storm is predicting an interest rate reduction in the first quarter of 2026, provided that inflation remains under control and financial stability is maintained.
The first repo rate announcement by the central bank is set for February.
"Looking ahead, we anticipate a 25 basis point rate cut in the first quarter of 2026, contingent upon inflation remaining contained and financial conditions staying stable," the analysts say.
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The last data released in November showed that inflation was slowing down on a yearly basis.
Simonis Storm says inflation slowed to 3.4% year on year in November, comfortably within the Bank of Namibia's target range, leaving room for an accommodative policy stance.
"Although the pace of easing is expected to be cautious, monetary conditions continue to support credit extension and economic activity, especially as liquidity conditions normalise following the Eurobond redemption," the analysts say.
- Reduction in corporate tax rate to 28% for non-mining companies
- Introduction of 20% corporate tax rate for small and medium enterprises (SMEs) and special economic zones
- Allowance of mining rehabilitation deductions
- Taxation of dividends from preference shares
- Introduction of 10% dividend withholding tax for individuals
- Adjustments to retirement and housing benefits
- Granting the Namibia Revenue Agency power to freeze accounts of defaulting taxpayers
- Exemption for SMEs from obtaining clearing agents for certain imports
- Contributed by KPMG
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