IMF announces faster economic growth in Botswana in 2013

botswana-diamondThe International Monetary Fund (IMF), on Tuesday said Botswana witnessed a faster economic growth in 2013 due to improved mining sector performance.

Mr Lamin Leigh, the Head of an IMF mission to Gaborone between April 22 and May 2, stated this in a report released at the end of the exercise.

Leigh said the team, which was in Botswana to conduct the 2014 Article IV Consultation, had fruitful discussions with critical economic stakeholders in the country.

“Botswana’s economy grew faster than expected in 2013 at about six per cent owing to the improved performance of the mining sector.

“The non-mineral sector slowed down from about six per cent in 2012 to about five per cent in 2013, due to recurring power supply disruptions and drought,’’ he said.

The IMF official said that for the first time in 15 years, headline and core inflation stayed within the Bank of Botswana’s medium-term objective range of three to six per cent.

“Data show that the government also recorded a small surplus in the 2013 fiscal year in the fiscal accounts through earners in current expenditure along with higher mining revenue

“On the external front, the current account balance turned into a surplus in 2013 supported by a rebound in diamond exports, this is a testaments to the authority’s good macro-economic management,’’ Leigh said.

He said that real GDP growth was expected to moderate to four and half per cent in 2014.

“This is due to expectation that the slowdown in diamond recovery and continued problems in electricity production and water supply will likely soften the pace of economic activity.

“The 2014 budget should help to rebuild the net financial position of the government; its emphasis on improving the performance and finances of parastatals is also well placed,’’ he said.

Leigh urged Botswana’s authorities to employ macro prudential measures in addressing the continued rapid increase in household indebtedness.

He said the mission welcomed steps being taken by the authorities to strengthen the capacity of the non-bank financial institutions regulatory agency.