Despite the Iraq war and global recession, the Bank of Namibia remains optimistic about the 4.1% economic growth projection for the Namibian economy this year. Launching the BoN’s annual report for the year ending 31 December, 2002 on Monday, Governor Tom Alweendo said, the diversification efforts of the government were bearing fruit as the commissioning of Skorpion Zinc, textile manufacturing and other industrial processes indicated. Diamond prices were still holding, Alweendo said and in general, the Namibian economy performed "satisfactory," with the high inflation rate probably coming down in the latter half of this year. Interest rates could be lowered in South Africa in a few months. In December 2002, Namibia’s total reserves in US dollars increased by 14.3% to 256 million US$. During last year the country’s foreign exchange reserves decreased from 2,3 to 2,3 billion N$, a decline of 15%. This was attributed to "substantial commerical bank outflows to South Africa" and the Rand/Dollar exchange rate.