Botswana’s economy is in reasonably good shape
Botswana’s economy is in reasonably good shape as economic growth continues to expand at a healthy pace. According to the latest available data, real GDP rose by 7.1% year on year in the third quarter of 2013, and is estimated to grow by around 6% for the year as a whole. Also, the government is on target to eliminate the budget deficit in fiscal year 2013/14 (April-March) and the current account is likely to post a surplus in 2013. The countries improving trade balance reflects strong growth in mining output and the successful transfer of diamond sales operations by De Beers from London to Gaborone (with the first sale in November 2013). In addition to this, Botswana’s central bank was able to cut its benchmark interest rate four times in 2013 (in April, June, August and December), taking the rate down to 7.5%. The loosening of monetary policy has been facilitated by a drop in annual consumer price inflation, which has remained within the Central Bank’s target range of 3.0-6.0% during most of 2013 and fell as low as 4.1% in November and December. The central bank appears confident that its approach will continue to stimulate growth and curb inflationary pressure over the next few years.