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Home » News » Business » SONA: Economic Outlook

SONA: Economic Outlook

Publishing Date : 13 November, 2017

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“Turning to our immediate economic outlook, in the aftermath of the 2015 recession, we have experienced a welcome recovery in domestic growth, which according to current medium term projections is expected to continue.


National Accounts data released by Statistics Botswana in April 2017, confirmed that our economy grew by 4.3% in 2016. As was anticipated in my previous address, this growth was driven by non-mining sectors such as Trade, Hotels & Restaurants and Transport & Communications industries, which registered an increase of 13.5% and 5.6% respectively.


A key factor in boosting the hotel and hospitality sector in recent years has been the growth of downstream diamond industry activities following the relocation of the Diamond Trading Company from London to Gaborone in 2012. Notwithstanding the negative effects of the BCL liquidation, contraction in the mining sector was also significantly reduced last year to 3.7%, as opposed to the 19.6% we suffered in 2015.
 

In line with these trends, domestic growth is currently projected to reach 4.7% in 2017 and 5.3% in 2018. This positive outlook, which builds on our average 3.9% growth during NDP 10, is expected to be sustained by further improvements in the Mining, Trade, Hotels & Restaurants, Transport & Communication, and Water & Electricity sectors. The projected expansion of the Water & Electricity sector, largely resulting from an additional unit at Morupule B power station and the restoration of Morupule A, is further expected to boost other sectors of the economy.


It is also anticipated that diamond production will increase, mainly due to a recovery in global demand, particularly in advanced economies. According to the International Monetary Fund’s (IMF) most recent World Economic Outlook report, released in October 2017, global economic growth is projected to increase from 3.2% in 2016 to 3.6% in 2017 and 3.7% in 2018. Despite this modestly positive outlook, medium term downside risks remain, including prolonged policy and political uncertainty in both advanced and emerging economies. Advanced economies are now expected to grow at 2.2% in 2017 and 2.0% in 2018, improving on the 1.7% attained in 2016.”

President Lt Gen Ian Khama delivering the State of the Nation Address on Monday

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