Botswana is anticipating an economic growth of 9.7% by year end 2021, which is a reasonable increase as compared with the 8.8% in the same period 2020.
Higher diamond sales and a recent rebasing of GDP accounts will add on to the 9.7% economic growth.
The Minister of finance and economic Development Peggy Serame also added that the 2021 budget deficit was expected to widen to 3.9% from the 2.8% in February.
With the objective being to improve the accuracy of its measurement of economic growth, Botswana revised in July its real GDP accounts base year 2016 to from 2006.
Last year’s economic contraction is now much deeper at 8.5% than the 7.9% originally recorded due to the rebasing, and the nominal GDP is now 4.6% lower at 172,552 million pula which is said to be$15.5 billion.
“The larger than forecast contraction in 2020 is, however, expected to be offset by an improvement in growth in 2021 which has now been revised upwards to 9.7 percent growth for the year,” Serame stated.
She further added that the reason for an upward revision was because of a mash up between technical changes resulting from the rebasing of GDP by Statistics Botswana in July 2021, and the strong performance of the diamond industry in the first half of 2021.
According to Serame the government was in advanced talks with the African Development Bank about matters concerning the $130 million budget support loan which are part of plans to tap external and domestic borrowing sources that will assist in the funding of its budget deficit.
Encouraged by high demand from big markets in the United States and China, Debswana Diamond Company, which is a joint venture between the government and Anglo American’s (AAL.L) De Beers, sales of rough diamonds climbed by 41% in the first half of 2021 after falling by 30% in 2020.