The forecasts add more fret to existing market worries on prospects for the country’s economy. Econsult, headed by former Bank of Botswana Deputy Governor, Dr Keith Jefferis, extrapolates that the economic output will remain as the economies main stay sectors suffer headwinds from international markets. While Botswana’s economy has been resilient to many shocks, economic researchers believe that headwinds in the diamond sector will continue to drag down economic performance. “The GDP growth outlook for 2025 is highly uncertain. Our current estimate is that GDP will be flat, with zero percent growth,” they said.
“The projected further reduction in diamond output will drag down overall growth, as in 2024, offsetting hoped-for positive growth in the non-diamond sector.” Of the many problems affecting the diamond market, researchers believe that the plans of US President Donald Trump’s administration to issue reciprocal tariffs will add more strain to the sluggish recovery of the diamond market. “The uncertainty surrounding the impact of the new US tariffs, both on the US diamond market and global growth more broadly, makes a less favourable outcome a distinct possibility,” the researchers noted. Two major credit rating agencies, Moody’s and Standard and Poor’s, have maintained Botswana’s credit rating but changed the outlook from stable to negative, an indication that a downgrade is a distinct possibility. These conclusions were reached before the US tariffs were announced. Both reflect the fact that the balance of payments and fiscal accounts are currently on an unsustainable path.
