Botswana Halves 2015 Growth Forecast on Poor Diamond Market

Reuters reported that Botswana’s government has halved its 2015 growth forecast due to weakness in the diamond market. The government now expects the country’s economy to grow by 2.6 percent this year; that’s down from a February target of 4.9 percent.
As quoted in the market news:

The southern African nation is now seen posting a deficit of 4.03 billion pula ($394 million) or 2.61% of the gross domestic product against a previous estimate of a surplus of 1.23 billion pula or 0.8% of GDP.
“The domestic economy is forecast to grow by 2.6% in 2015, underpinned by expected decrease in demand for diamonds in the global market,” the strategy paper said.
“A higher growth rate of 4.9% in projected for 2016. However, the downside risk to these projections continues to be the country’s high dependence on diamonds, whose demand and prices are subject to global fluctuations.”
A sustained weakness of the diamond market throughout the year has seen diamond prices softening while annual output targets have also been trimmed.

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