Botswana Economic Outlook
In the third quarter of 2022, annual growth accelerated to 6.3% from Q2’s 5.8%. Q3’s growth was underpinned by strong domestic electricity production and the diamond trade. Turning to Q4, the economy likely continued to grow strongly. Diamond prices remained at historically high levels throughout the quarter, while the unemployment rate declined from the year-earlier period. Less positively, exports contracted in October–November, while double-digit inflation likely undermined private consumption. In other news, the government presented the FY 2023 budget on 6 February. It projects a higher deficit than in FY 2022 due to a significant increase in government investment, with BWP 13 billion (around USD 1 billion) earmarked for infrastructure projects.
Inflation in January came in at 9.3%, down from December’s 12.4% but remaining well above the Central Bank’s 3.0–6.0% target range. December’s notable decline was mainly driven by easing transport price pressures. Inflation is expected to ease in 2023 as a whole but to average above the Central Bank’s target.