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Friday 22 August 2014, 07:54 am.
Economy grows at highest rate in three years

A robust recovery in diamond production in the second quarter of this year saw the country recording the highest quarterly economic growth figures in almost three years.
By Brian Benza Wed 09 Oct 2013, 09:39 am (GMT +2)
Mmegi Online :: Economy grows at highest rate in three years

According to figures released by Statistics Botswana on Friday, economic growth, measured by real Gross Domestic Product (GDP) registered a 7.9 percent increase between April and June this year, doubling the 3.3 percent growth rate recorded in the previous corresponding period.

A higher quarterly growth rate was last recorded in the third quarter of 2010 when real GDP registered an 11.5% rise.

In a statement released on Friday, SB says the high growth rate is on the back of higher diamond production as Debswana ramped up second quarter output by 19.2% to 6.4 million carats.

"The mining sector, whose contribution to GDP increased to 27% during the second quarter from 19%, expanded strongly by 15.6% during the quarter from a contraction of -3.6 percent during the first quarter.

"The substantial growth is also attributed to sectors such as financial & business services, general government and personal & social services which grew by 7.7 percent, 6.8 percent and 6.2 percent respectively. All other sectors also recorded a positive growth of more than 2.0 percent over the period," said the statistics agency.

The Water & Electricity and Manufacturing sectors recorded positive growths of 2.3 and 4.9 percent respectively after recording negative growths in the fourth quarter of 2012 and the first quarter of 2013.

"Although value added for the electricity is still negative it has improved compared to the previous quarters.

"This was because of imported electricity which decreased by 9.0 percent and in turn reduced the intermediate consumption, which was substantially high in the previous quarters. Local electricity generation recorded a substantial increase during the quarter under review," said SB.

The manufacturing sector increased because of meat & meat products and other manufacturing sub sectors.

According to the international merchandise trade statistics monthly digest of July 2013, meat & meat products exports went up by 160% in the second quarter of 2013. Botswana Meat Commission (BMC) and municipal abattoirs also recorded a large number of slaughtered cattle.

Experts believe Botswana's economy is likely to grow at a rate of between 4 and 5 percent from 3.7 percent recorded last year. In a recent publication, the IMF said real GDP will grow by about 4 percent in 2013 on the back of a strong non-mineral GDP growth and an anemic mining sector.

According to the IMF, growth is expected to pick up slightly to 4.4 percent in 2015 supported by the base effect of increased electricity production and a recovery in the mining sector and subsequently stabilise at around 4 percent.

The Bank of Botswana, on the other hand, forecast GDP growth in the 12 months to June 2013 to be around 5 percent, reflecting a slower increase in the non-mining output and a marginal contraction in the mining sector.

"It is expected that non-mining output will remain below potential in the medium term and generate minimal inflationary pressures. It is anticipated that the influence of demand on economic activity will be modest, largely reflecting trends in government expenditure and personal incomes," says the central bank.

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