Middle East unrest weighs on deficit, inflation

Friday, June 12, 2026 | 60 Views |

Under pressure: Finance Minister, Ndaba Gaolathe PIC: KENNEDY RAMOKONE

The impact of ongoing conflict in the Middle East is likely to push average inflation to double digits, whilst widening the budget deficit and delaying a return to fiscal stability, researchers at Standard Chartered have said.

In a recent research report, Emmanuel Kwapong, Economist Africa at Standard Chartered, said the Middle East conflict was likely to worsen the country’s existing macroeconomic challenges, which largely emanate from the prolonged weakness in diamonds.

“We now expect a more subdued recovery in the diamond sector, Botswana’s key growth driver, as the conflict weighs on global growth and discretionary spending in key diamond end-markets," he said.

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