The government of Botswana expects growth to slightly fall to 4.3% of GDP this year compared to 4.5% last year, the Deputy Secretary in the ministry of finance, Kelapile Ndobano said.
The official said the weak outlook is linked to disruptions in the diamond sector, one of the country’s main export products. According to him, Botswana’s diamond sales fell by 16% in the second quarter of 2019 due in particular to the many headwinds blowing on the global market, faced with weak demand in the main markets, overstocking and poor profits due to tight margins between rough and polished diamonds’ prices.
For 2020, authorities believe that economic activity should pick up again, with growth expected to reach 4.6% next year. According to Ndobano, the non-mining sector, especially the services sector, will boost growth, indicating that the economy is now more diversified as diamonds are no longer the main growth factor.
Let’s note that the country’s projected budget deficit for 2019/20 has been revised upwards from 3.5% to 3.8% of GDP. It is expected to be mainly financed by domestic borrowing, before declining to 3.1% of GDP in 2020/21.
Source: Ecofin Agency