Botswana Business Forecast Report Q4 2012: New Research Report Available At Fast Market Research

New Country Reports research report from Business Monitor International is now available from Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 17 October 2012

We are forecasting real GDP growth in Botswana of 4.2% in 2012 and 5.4% in 2013. The solid outlook is driven by growing interest in the country's mining sector and the investment in infrastructure this will necessitate.

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But subdued public and private consumption coupled with uncertain external demand tempers our forecasts. Governance continues to receive high marks in Botswana. The latest budget figures show commitment to controlling spending and reducing the deficit.

While diamonds will continue to dominate the economy for years to come, we highlight copper and coal mining, infrastructure, telecoms and banking as other sectors poised for growth. Major Forecast Changes We have made downward revisions to our real GDP growth forecasts for Botswana over the next two years, as a protracted global economic slowdown will temper the outlook for diamond exports, while the government's attempts to reduce its wage bill will weigh on final consumption.

We are now forecasting economic expansion of 4.2% in 2012 and 5.4% in 2013, from previous estimates of 5.4% and 5.5% respectively. In light of the 2012 budget announcement, we have made slight revisions to our fiscal forecasts for the country, largely owing to improved methods of tax collection implemented by the Ministry of Finance & Development Planning and its commitment to reduce the public sector wage bill.

We are now forecasting Botswana's budget deficit to narrow to 1.7% of GDP in FY2012/13, compared with previous estimates of 4.4%. Key Risk To Outlook Botswana's growth remains inextricably linked to the condition of the global economy, with particular exposure to the demand for its key export, diamonds. A greater slowdown than we currently anticipate in the economic expansion of wealthy countries would be detrimental to our growth forecasts.

A full resolution to the public sector strikes held between April and June 2011 has not been forthcoming as the government ceded to a 3% pay rise for civil servants, far lower than the 16% demanded. Another flare up of strikes would likely cause further economic disruption.

Similarly, popular protest over the government's privatisation plans could have negative economic consequences.

 

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