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Botswana economy could shrink 1.7% this year, financing minister says

Botswana's economy could shrink 1.7% this year, the very first contraction considering that the COVID19 pandemic, mostly since of an extended decline in the international diamond market, finance minister Ndaba Gaolathe stated.

In February, when it presented its spending plan, the southern African country's federal government forecast 4.2% development in 2024 however weakness in the diamond market considering that late last year has harmed demand for Botswana's essential export.

Debswana, Botswana's joint venture with De Beers, lowered its 2024 diamond production assistance by about 6 million carats to 17.9 million carats. De Beers diamond sales were down 40% in the first nine months of 2024 from the year earlier duration.

Gaolathe informed lawmakers on Thursday that the contraction in Gdp (GDP) this year could be greater than 1.7% ought to extra risks materialise, according to a copy of his remarks sent out to reporters by the finance ministry.

Those threats include even more interruptions in the diamond market, the effect of an extreme regional dry spell and problems at a. major power plant.

The deficit spending is now seen at 6.75% of GDP, compared to. the price quote of 2.8% given up February, Gaolathe stated.

Like other southern African nations Botswana has actually been. impacted by the worst regional dry spell in decades, which has. sapped financial development in neighbouring Namibia and Zimbabwe.

Botswana's reserve bank stated on Thursday that the economy. would contract in 2024 but did not state by how much.

(source: Reuters)