Botswana

Botswana’s real GDP growth decelerated to 3.1% y-o-y in Q3 2019, compared to 4.1% y-o-y during the same quarter in 2018. Weak exports performance, emanating from rough-diamonds and other major exports, contributed to the subdued growth experienced in Q3 2019. We forecast a real GDP growth rate of 3.4% in 2020, improving to 3.9% in 2021. Price pressures in the country remained stable below the lower bound of the target range between Q4 2019 and the beginning of Q1 2020 - registering at 2.2% y-o-y for December 2019 and January 2020, respectively. Nevertheless, the expected hike in utility tariffs, coupled with the downward adjustment of the pula crawl rate, is likely to lead to price pressures in the short term. Botswana’s fiscal policies have historically proven to be a boon. However, low global diamond prices, in turn leading to reduced domestic production and decreased tax revenue, saw Botswana posting a series of budget deficits in the past few years. Furthermore, state-owned enterprise bailouts and planned public sector salary increases will likely weigh on government spending in the short term. Despite recent pressures, our overall political risk assessment remains unchanged at low with the trend stable. (Source: Botswana Quarterly Update, published March 2020.)

Macroeconomic Data

(2019)