Namibia's overall inflation for 2022 is now projected to average 6.1 percent, up from 5.8 percent initially projected, Governor of Bank of Namibia, the central bank, Johannes Gawaxab said Wednesday.

Speaking at the monetary policy announcement in Windhoek, Gawaxab said the upward revision is mainly due to expected higher food inflation and a weaker exchange rate.

"Risks to the domestic economic outlook in the medium term continue to be dominated by the ongoing Russia-Ukraine conflict, global supply chain disruptions, and high prices of oil and food. This may cause inflation to persist for longer and prompt further interest rates tightening beyond what is currently expected. Other risks include the rising probability of a global economic recession, climatic swings, the possible emergence of new COVID-19 variants, animal disease outbreaks within the region, other infectious diseases as well as geopolitical tensions," he said.

Namibia's annual average inflation rate increased to 5.8 percent during the first nine months of 2022, compared to 3.5 percent in the corresponding period of 2021, he said.

The domestic economic growth is expected to be higher in 2022, from a growth rate of 2.7 percent recorded in 2021, he said, adding that the projected growth in 2022 will be driven mainly by diamond and gold mining coupled with better recovery prospects across most sectors.

Meanwhile, Gawaxab said the Monetary Policy Committee decided to increase the repo rate by 75 basis points to 6.25 percent.

"The decision was taken with due consideration of the persistent inflationary pressures and is deemed appropriate to safeguard the one-to-one link between the Namibia Dollar and the South African Rand while meeting the country's international financial obligations," he added.