Economic growth seen 7.8 pct in 2010 - Poll

| Thursday November 25, 2010 00:00

 

 A poll of 10 economists showed the economy should expand by a median 7.8 percent this year, up from estimates of 5.4 percent growth in a previous poll in May.

The poll forecast was largely in line with the goverment's expectation of a 7.9 percent increase after a recession last year.

'We foresee that economic output will continue to strengthen during the rest of 2010 on a combination of recovering global commodity demand and a still-high level of government spending,' said Rick Walker, an economist at NKC Independent Economists.

The International Monetary Fund is more optimistic, seeing the economy of the world's largest diamond producer growing by 8.4 percent this year.

The poll also showed inflation would average 7.0 percent for this year, easing to 6.5 percent in 2011.

'Botswana's 2011 headline inflation rate is expected to reap the benefits of favourable regional inflation, especially from its close neighbour South Africa,' said Thea Fourie, economist at IHS Global Insight.

At 3.2 percent, South Africa's inflation is closer to the lower end of the central bank's target of between 3 and 6 percent, thanks to a rand currency ZAR=D3 that has gained over 26 percent since the beginning of last year.

Botswana's inflation stood at 7.2 percent in October, and the Bank of Botswana expects it to fall within the 3-6 percent objective range in the second quarter of 2011.

Botswana's central bank left its bank interest rate steady at 10.0 percent on last month, saying this was consistent with achieving its inflation target in the medium term.-(Reuters)