Botswana - the year ahead

While official estimates suggest that growth will bounce back to 7.9 percent in 2010, the medium termoutlook, especially for the non-mining economy, remains subdued. Ambitious fiscal consolidation plans (perhaps in reaction to an earlier downgrade of Botswana's prized single-A rating by S&P) aim to restore a balanced budget by FY13.

Given the dependence of the non-mining economy on government spending (which averaged 40 percent of GDP or more pre-crisis), Botswana may not see a sustained return to pre-crisis growth rates for some time. This is despite improved prices for gem diamonds, which reflect output curbs as well as a recovery in global demand.