The economy expanded by 8.2% year-on-year in the third quarter due largely to stronger diamond production, a performance that broke a series of contractions stretching back over six quarters.
By comparison, the third quarter of last year registered a four percent contraction in Gross Domestic Product (GDP), which is a measure of economic activity.
While the figures are positive and break the rolling contractions in the economy, they also represent base effects, or the statistical impact that low numbers in any prior corresponding period have on the current reporting period. Analysts explained that while the 8.2% growth would seem spectacular, it was an arithmetic consequence of the deeper contraction of four percent in the third quarter of last year, rather than sound, sustainable underlying factors.
The analysts cautioned that the third quarter GDP figures across sectors look strong largely because they are being compared with a low base from a year ago.
According to the figures from Statistics Botswana, the third quarter performance was driven by real value added of diamond traders which rose 88.1 percent, mining & quarrying (39.5 percent), Finance, Insurance & Pension Funding (5.2 percent), transport and storage (5.2 percent), and accommodation & food Services (4.6 percent).
Diamond traders recorded a 74.9% decline in the third quarter of 2024, while mining and quarrying fell by 27% over the same period.
Both sectors this year were lifted by stronger diamond mining, with the country’s mines producing 6.12 million carats in the third quarter, compared to 4.1 million carats last year.
In a recent update, Anglo American said the higher third quarter production in Botswana was in anticipation of the extended plant maintenance downtime in the fourth quarter of 2025.
Statistics Botswana figures also show that the non-mining GDP increased by 1.6 percent in the third quarter of 2025 compared to a 4.7 percent rise registered in the same quarter of the previous year.
Sectors such as financial services, wholesale and retail trade, manufacturing, transport and storage, accommodation and food services, ICT and real estate, all registered growth in the third quarter, while construction and water and electricity contracted.
While the water sector grew, local production of electricity decreased by 38.6 percent during the third quarter. The volume of imported electricity increased by 120.7 percent owing to challenges at Morupule B power station.
Despite the rosier performance in the third quarter, fiscal authorities still expect that full year GDP figures will show a contraction of nearly one percent.
