04:50 pm
21 October 2016

Botswana’s Economy Hit By Recession

GABORONE (Reuters) – Botswana’s economy shrank 3.7 percent in July-September compared with the previous three months as diamond and copper production plunged, its second quarterly contraction in a row and marking a technical recession.


Official data on Thursday revised second-quarter growth to -0.1 percent compared with the previous January-March period.

Gross domestic product was 3.5 percent lower in the third quarter compared with a year before, with annual growth revised to 1.7 percent in Q2, Statistics Botswana said.

“The decline in GDP growth rate was attributed to a decline in diamond production by 33.4 percent,” the Central Statistics Office said in a statement.

A sharp decrease in copper production, by 14.1 percent, also contributed to the economy contracting for the second consecutive quarter.

Botswana’s President Ian Khama announced a bold economic stimulus package in November as a sharp drop in demand for its diamonds hampered growth.

Earlier in December, Botswana’s Treasury said it needed an additional $123 million for the 2015/16 financial year to fund measures to ease water and power shortages.

On Wednesday, the International Monetary Fund warned that it expected Botswana’s growth to slow to 2.3 percent in 2015, compared with 4.4 percent growth in 2014, due to weak global demand for diamonds and falling customs revenues.[J8N12Y01F]