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Botswana expects economy to shrink less in 2020 than previously forecast

Mining, has been hampered by the pandemic with diamond buyers unable to travel to Botswana to view and buy diamonds.
Image: Waldo Swiegers/Bloomberg

Botswana expects its economy to shrink by 8.9% in 2020, less than its previous forecast for a 13.3% contraction, boosted by better-than-expected mining output and a shorter lockdown, the central bank said on Tuesday.

Botswana, which has just 65 reported coronaries infections and one death, ended a 48-day national lockdown on May 21, allowing businesses and schools to reopen.

“The ministry of finance now sees a lower economic contraction in 2020. The first number was based on an assumption of a longer lockdown and larger contraction in mining activities,” said Tshokologo Kganetsano, director of research and financial stability at the central bank.

However, the economy has still been damaged by the coronavirus outbreak. Its budget deficit is expected to be more than double as reduced diamond sales and exports hit revenues.

Mining, the country’s biggest revenue earner, has been hampered by the pandemic with diamond buyers unable to travel to Botswana to view and buy diamonds.

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