The Bank of Namibia estimates real GDP growth at 4.6% in 2010-a stronger recovery than we had previously estimated owing to substantially higher diamond output and sales. We forecast that real GDP growth will slow to 4.3% in 2011. Diamond output will increase more modestly than last year to some 1.6m-1.7m carats, but uranium production will expand by 10% to some 5,800 tonnes. The increase will be less than previously forecast, as stage 3 expansion at the Langer Heinrich mine will not now become fully operational until mid-2011 and the commissioning of the Trekkopje mine has been delayed from the end of 2011 to early 2013 because of technical problems. Overall mining output should expand by 7%, as two copper mines closed at the end of 2009 have resumed production and output of gold, zinc concentrates and fluorspar will increase. Our mining growth forecast is double that of the BoN, which explains why we forecast higher GDP growth in 2011 than the bank's 4.1%. Good rainfall in the 2010/11 wet season should result in higher livestock and crop production, but despite improved stocks and landings, fishing output, which is largely exported, will again contract, although more modestly than in 2010, owing to weak demand in the main European markets. The commissioning of the Ohorongo cement plant in February and planned doubling of capacity at the Tsumeb copper smelter will boost manufacturing growth to 6%. These projects, as well as government spending on infrastructure, will underpin a modest improvement in construction real value added to 5%.

In 2012 real GDP growth will increase to 4.5%, provided demand for mineral commodities continues to grow and prices remain strong. Diamond output will increase only to some 1.8m carats, but uranium production will increase by 10% to 6,400 tonnes owing to a full year's Stage 3 output from Langer Heinrich. Copper concentrate production from the reopened mines will also increase. Without a significant rise in the total allowable catch, the fishing sector will record modest growth at best. Manufacturing growth will rise to 8% with higher output by diamond cutters and the first full year's production at the Ohorongo cement plant and expanded Tsumeb smelter. Depending on the weather, cattle and sheep marketing for local slaughter should continue to improve. Growth in the construction sector will remain strong, owing to high government spending on infrastructure, and the likely start on construction of the Husab and Etango-and possibly the Valencia-uranium mines.