20 Jun 2024

Ministry of Finance projects economic growth at 4.2 per cent, whereas the International Monetary Fund (IMF) perceives growth to be at 3.6 per cent in 2024.

However, it is important to highlight that economic activity remained restrained in the first half of this year owing to unfavorable global economic conditions, geopolitical events and domestic structural constraints.

Briefing the media Tuesday on the 2023 economic developments, Bank of Botswana director, research and financial stability, Mr Innocent Molalapata said with reduced economic performance in the first half of the year one would expect that economic growth of 4.2 per cent was unlikely to be realized, hence there was a high change of downward revision in to the projections.

He said this was mainly due to the information that has already been realized in 2024.

He said global inflationary pressures were projected to be moderate in 2024, therefore, global inflation was expected to decrease from 6.8 in 2023 to 3.6 per cent in 2024 and it was expected to remain within the 3 to 6 objective range into the medium term.

The domestic real GDP was estimated to have expanded by 2.7 per cent, however, forecast growth rate was lower than the 6.7 per cent which the country needed to become a high-income status nation by 2036, he said.

Therefore, he said there was a need for concerted efforts to accelerate traction of transformation initiatives and impact of resource commitment.

He said domestic inflation averaged 5.2 per cent in 2023 and declined to 3 per cent in May 2024 and was expected to remain within the 3 to 6 per cent objective range into the medium term.

Meanwhile, Stanbic Bank Botswana, Global Markets Corporate Dealer, Ms Onalethata Letlole said the government has dropped rates at the back of easing of inflation by a significant 25 basis points (0.25%). She said the country came from inflation of 14 per cent to the current band of 3 to 6 per cent set by Bank of Botswana as an objective.

However, she said to make it easy on people and to stimulate the economy, the central bank might take a further decision to cut interest rate by approximately 0.25 per cent, and likely to happen around August 2024. Ends