Botswana's economy has experienced a slowdown, registering a growth rate of just 1% in the first nine months of the year, primarily due to weak performance in the diamond sector.
 
This is according to a statement by the economy ministry earlier this week. 
 
“The slowdown is mainly due to a decline in diamond production, partly offset by construction projects funded by fiscal expansion,” the statement reads. 
 
Botswana’s economic growth has experienced a slowdown over the past few years, from 5.5% in 2022 to 2.7% in 2023. 
 
Despite the current slowdown, diamond production in Botswana is projected to rise to 21.1 million carats in 2024, gradually increasing to 23.3 million carats in 2025 and reaching 25 million carats in 2026. 
 
According to the latest report from the International Monetary Fund, a robust return to growth is anticipated, with GDP expected to jump to 5.2% in 2025 and 4.8% in 2026.
 
“Although risks to the outlook remain elevated, a strong recovery is expected in 2025, driven by the rebound in diamond production and trade,” the IMF stated. 
 
However, the IMF highlighted that the economic outlook remains highly uncertain due to the emergence of more affordable synthetic diamonds in the market. 
 
“A decline in diamond revenues could be offset by an increase in the budget deficit and a reorientation of priorities in terms of investment spending.”
 
Furthermore, the international financial institution also observes that Botswana's financial sector is generally sound, stable, and resilient.  
 
However, the budget deficit is projected to widen further to 6% of GDP, driven by declining mining revenues and increased spending.  
 
In addition, the IMF said that inflation has stayed within the central bank's medium-term target range since July 2023 and is expected to remain low.