08 Nov 2021

Botswana’s economy is expected to grow by 9.7 per cent this year as global diamond prices continue to improve since the last quarter of 2020, President Dr Mokgweetsi Masisi has said. 

He was delivering his annual State-of-the-Nation Address yesterday. 

The mining sector recovery is good news for an economy whose upward trajectory was cut short by the outbreak of COVID-19 in 2020. 

The pandemic led to an 8.5 per cent contraction of most sectors of the economy in real terms, compared to  three per cent growth in 2019, said President Masisi.  He said the outturn was expected given the sharp GDP contractions of 26 per cent and 4.4 per cent in the second and third quarters of 2020. 

The President explained that at regional level, GDP for Sub-Saharan Africa, estimated to have contracted by 1.7 per cent in 2020, was expected to rebound to a growth rate of 3.7 and 3.8 per cent in 2021 and 2022 respectively. 

Growth prospects, he said were however subject to downside risks, mainly due to tightening of global financial conditions, general decline in global trade, spread of COVID-19 infections and emergence of new variants combined with slow vaccine roll out.  “The International Monetary Fund’s World Economic Outlook shows a robust global economy recovery in 2021 and 2022 with a projection of 5.9 per cent and 4.9 per cent, respectively, driven by growth in advanced economies. 

The improved growth forecasts reflect continued fiscal support and the successful roll out of vaccines,” he said. 

Advanced economies were expected to register a growth rate of 5.2 per cent this year and 4.5 per cent in 2022, while emerging markets and developing economies were expected to register faster growth rates of 6.4 per cent in 2021 and 5.1 per cent the following year. 

President Masisi however, warned that despite this anticipated growth, there were challenges related to uneven recovery and the potential for persistent economic disruption from the pandemic. ENDS