By Enyichukwu Enemanna
The International Monetary Fund (IMF) has slashed Botswana’s 2024 growth forecast to 1%, arising from low production of diamond, the country’s main economic hub, the international lender said in a statement.
IMF had in April pegged growth estimate at 3.6%, a prediction it now says may not be achievable.
The budget deficit is also expected to widen to 6% from 3.45% due to a fall in mineral revenues, the IMF added.
It therefore urged the diamond-rich southern African country to consider slowing down new infrastructure projects to help the economy gain some stability.
“The continued (economic) slowdown is mainly due to a fall in diamond production,” said IMF in the statement on Friday.
“Some fiscal relaxation is warranted this year given the fall in mineral revenues, but the execution of the ambitious capital budget should be slowed down to contain the deterioration of the deficit and prioritize projects with the highest returns,” the IMF said.
Heritage Times HT gathered that lower demand by consumers as well as global economic weakness has reduced the demand outlook for diamonds, often considered a luxury items.
In February, Finance Minister Peggy Serame projected the economy would grow by 4.2%.
The central bank few months later, however said this target was unlikely to be achieved, citing continued dwindling fortunes of the global diamond market.
Botswana gets between 30-40% of revenue and 75% of its foreign exchange earnings from diamond sales.
