A recent rebasing of the Gross Domestic Product (GDP) accounts for Botswana will help boost economic growth to 9.7 per cent in 2021, compared to an 8.8 per cent forecast in February, the country’s Minister of Finance and Economic Development, Peggy Serame, said on Monday.
It is expected that the 2021 budget deficit will increase to 3.9% from 2.8% in February, she added.
Botswana revised its real GDP accounts base year to 2016 from 2006 in July, in an effort to improve its measurement of economic growth.
Due to the rebasing, last year’s contraction was much deeper – at 8.5 per cent – than first reported. Nominal GDP dropped 4.6% to 172,552 million pula ($15.5 billion).
“The larger than forecast contraction in 2020 is, however, expected to be offset by an improvement in growth in 2021 which has now been revised upwards to 9.7 per cent growth for the year,” Serame said in response to emailed questions.
According to her, the upward revision is due to a combination of technical changes from Statistics Botswana’s rebasing of the economy in July 2021, as well as a big performance by the diamonds sector in the first half of 2021.
Debswana Diamond Company, a joint venture between the government and Anglo American De Beers, saw its sales of rough diamonds jump 41 per cent in the first half of 2021 as major markets like the United States and China drove sales.
Serame said the government had reached an agreement for a $130 million budget support loan from the African Development Bank (AfDB), as part of plans to borrow money both domestically and externally to help fund the deficit.