Trade deficit reaches P1.4bn
Mbongeni Mguni | Thursday October 31, 2019 15:16
A merchandise trade deficit means the country is importing more goods than it exports, a situation that weakens local foreign reserves and ultimately weighs on the value of the Pula.
Statistics Botswana figures indicate that exports for the month were higher at P3.7 billion powered generally by stronger diamond sales. Imports for the month were 14% softer at P5 billion with reductions across the traditional high-ticket items such as diamonds, vehicles and equipment as well as fuel.
The August deficit was an improvement from the P3.2 billion shortfall recorded in July, occasioned by a sharp fall in diamond exports. According to the data agency, the cumulative merchandise trade balance for the year to August is a P6.6 billion deficit, a figure which compares negatively with the P2.7 billion surplus recorded for the full 2018 calendar year.
The difference this year has been weakening diamond exports caused by lower demand in the cutting and polishing firms, a critical segment of the rough diamond pipeline.