Due to a slowdown in mining and lower growth in the construction and manufacturing sectors, economic growth fell to 3.7 percent from 6.1 percent in 2011.Speaking at a media briefing on Wednesday, Mohohlo said activity on the ground suggests that mining sector output, particularly diamonds, will be relatively close to last year's levels with indications that non-mining sector growth is slowing down."My colleagues at Debswana have informed me that production will likely be at the same levels as in 2011 due to market demand. Indications are also that the non-mining sector will not grow at robust rates due to subdued domestic demand largely on the back of stagnant incomes," she said.
The mining sector declined by 8.1 percent last year as Debswana cut production from an initial forecast of 22 million carats to 20 million carats. On the other hand, the non-mining sector grew by 5.8 percent supported by growth in transport and communications, agriculture and financial services.The manufacturing sectors on the other hand were heavily affected by throughput challenges at BMC, the troubled textiles sector and regulations in the alcohol industry.On the back of sluggish economic trends, the Bank of Botswana last month cut the bank rate by 50 basis points in an effort to reignite the flagging econo my.The rate had remained constant since a reduction in December 2010. However, Mohohlo said despite the inflation trending downwards, scope for further loosening of the monetary policy remained tight.
