A river that runs through the marsh in Botswana

Botswana Economic Forecast

Botswana Economic Outlook

After a solid annual 5.4% GDP expansion in the first quarter, the economy likely performed well in Q2. Lower average inflation should have supported household consumption, while a robust acceleration of credit growth in the quarter likely supported domestic demand. On the other hand, weak demand for diamonds—by far the country’s largest export—due to the growing popularity of lab-produced alternatives—should have capped the growth contribution of the external sector. In other news, at the beginning of September, South Africa announced a private-public partnership to upgrade its main border crossings with some neighboring countries, including Botswana. The project, if completed, will ease trade bottlenecks between the two countries, boding well for Botswana’s external sector in the coming years.

Botswana Inflation

Inflation was 1.2% in August (July: 1.5%), staying below the Central Bank’s 3.0–6.0% target range for the second consecutive month. Inflation should average below 2022’s levels in 2023 due to reduced international commodity prices and the lagged effects of rate hikes. Price swings for food, oil and fertilizers are risks to the outlook.

This chart displays Economic Growth (GDP, annual variation in %) for Botswana from 2013 to 2022.

Botswana Economic Data

2018 2019 2020 2021 2022
Population (million) 2.5 2.5 2.5 2.6 2.6
GDP (USD bn) 17.0 16.7 15.0 18.7 20.3
GDP per capita (USD) 6,948 6,689 5,880 7,221 7,700
GDP (BWP bn) 174 180 171 208 252
Economic Growth (Nominal GDP, ann. var. %) 4.2 3.6 -4.7 21.2 21.2
Economic Growth (GDP, ann. var. %) 4.2 3.0 -8.7 11.9 5.8
Domestic Demand (ann. var. %) 5.2 7.1 -0.3 2.3 2.9
Private Consumption (ann. var. %) 5.4 3.1 2.3 2.3 4.7
Government Consumption (ann. var. %) 2.2 10.3 4.0 4.0 3.0
Fixed Investment (ann. var. %) 8.6 10.2 -9.2 0.3 -0.6
Exports (G&S, ann. var. %) 11.9 -8.8 -18.6 31.7 -5.6
Imports (G&S, ann. var. %) 15.9 11.6 5.0 2.3 -11.8
Unemployment (% of active population, aop) 19.8 20.1 21.0 21.2 20.7
Fiscal Balance (% of GDP) -5.0 -8.5 -10.9 -2.4 -2.0
Public Debt (% of GDP) 14.9 16.5 18.7 19.0 19.9
Money (ann. var. of M2 %) 8.3 8.0 5.9 5.0 6.8
Inflation (CPI, ann. var. %, eop) 3.5 2.2 2.2 8.7 12.4
Inflation (CPI, ann. var. %, aop) 3.2 2.8 1.9 6.7 12.2
Bank Rate (%, eop) 5.00 4.75 3.75 3.75 2.65
Exchange Rate (BWP per USD, eop) 10.73 10.58 10.80 11.76 12.75
Exchange Rate (BWP per USD, aop) 10.20 10.76 11.45 11.09 12.38
Current Account Balance (USD bn) 0.1 -1.2 -1.5 -0.3 0.6
Current Account Balance (% of GDP) 0.4 -6.9 -10.3 -1.4 2.9
Merchandise Trade Balance (USD bn) 0.5 -1.1 -2.0 -0.7 0.5
Merchandise Exports (USD bn) 6.6 5.3 4.3 7.4 8.3
Merchandise Imports (USD bn) 6.1 6.3 6.3 8.1 7.7
Merchandise Exports (ann. var. %) 10.5 -20.2 -18.3 72.8 11.5
Merchandise Imports (ann. var. %) 18.5 3.6 -1.0 28.9 -4.3
Foreign Direct Investment (USD bn) 0.3 0.1 0.0 -0.3 0.2
International Reserves (USD bn) 6.7 6.2 4.9 4.8 4.3
International Reserves (months of imports) 13.1 11.7 9.5 7.1 6.6
External Debt (USD bn) 1.8 1.6 1.6 2.0 -
External Debt (% of GDP) 10.5 9.4 10.7 10.6 -

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