Botswana’s economy is forecast to continue its downward trajectory and expand by one percent in 2024 on the back of headwinds affecting the diamond sector, the International Monetary Fund (IMF) has announced.
IMF Africa Division chief Luc Eyraud said Botswana’s economy is expected to continue with the deceleration that started in 2023 when it contracted to 2.7 percent from 5.5 percent the previous year.
“Looking ahead, the economy is expected to decelerate further this year, with growth projected at one percent.” Eyraud said in a statement on Saturday at the end of consultations between the Bretton Woods institution and Botswana government officials in Gaborone.
He added: “The continued slowdown is mainly due to a fall in diamond production, partly offset by construction projects financed by the fiscal expansion.”
He noted that the growth was expected to converge towards the long-run target of four percent as diamond mining recovers.
Eyraud attributed the deceleration to a sharp decline in diamond trading and mining activities as global demand for rough diamonds decreased.
He, however, applauded the Botswana authorities for managing to bring inflation down from a peak of 14.6 percent in August 2022 to within the central bank’s objective range of three to six percent, where it is expected to remain in the medium term.
JN/APA