Botswana is expected to see economic growth rebound to 4% in 2024 as diamond sales pick up, according to the African Development Bank (Af DB). This follows a dip in real GDP growth to 2.7% in 2023, driven by declines in water and electricity production and a significant slowdown in the diamond trade.According to the Af DB’s latest African Economic Outlook report, these declines were due to drought conditions and weak global demand. On a positive note, average inf lation dropped to 5.3% last year, staying well within the Bank of Botswana’s acceptable range of three to 6%. In April this year, with inf lation expectations well anchored, the central bank maintained its monetary policy rate at 2.4% after reducing it by 25 basis points in December last year.While the outlook for Botswana remains relatively positive, thanks to its status as one of Africa's most stable countries with strong institutions and democratic governance, the Af DB has highlighted some downside risks. These include higher-than-expected inf lation due to supply chain disruptions amid rising geopolitical tensions, weaker diamond trade if demand stays low, El Niño-driven weather patterns, and the potential for continued weak economic conditions in South Africa.With 2024 being an election year for the country, S&P Global has also predicted a rebound in Botswana’s GDP growth. They estimate that real GDP growth dropped to 3.5% last year, down from 5.5% in 2022.
