Gaborone, Botswana — 06 November 2012 – Botswana’s economic growth is expected to slow to 3.5% this year “’ more than 50% below the 8% recorded in 2011 “’ because of lower-than-expected mining output.
Reuters reports that in a state of the nation address in the capital, President Ian Khama said reduced output from the mining sector in particular was likely to drag growth below the 4.4% projected in the February budget.
“The diamond market has been significantly affected by the prevailing global economy slowdown. We expect this to have an adverse effect our economy, as diamonds are still a significant contributor to our GDP,” said President Khama.
The landlocked Southern African nation is the world’s biggest diamond producer, making its economy vulnerable to switches in global demand trends.
Subdued demand from key markets such as China has seen production stagnate, putting a lid on growth prospects in a country that depends on mining for about a third of its economy.
Khama went on to say that economic growth should pick up to 5% next year.
The International Monetary Fund said last month that Botswana’s economy should grow 3.8% this year, up from the 3.3% forecast in the April.
Source: Reuters Africa. For more information, click here.