Botswana’s government now expects the country’s economy to contract by almost 1% in 2025 as its key diamond sector continues to struggle, Finance Minister Ndaba Gaolathe said during a budget review on Friday.
When the main budget was presented in February, the Southern African nation had projected a 3.3% gross domestic product (GDP) growth this year, rebounding from a 3% contraction in 2024.
However, by mid-year, the government revised its outlook to almost no growth, citing a prolonged downturn in the global diamond market that shows no signs of easing, according to Reuters.
Diamonds typically account for around one-third of Botswana’s national revenues and three-quarters of its foreign exchange earnings.
Don’t Miss This:
Botswana And Angola In Talks To Acquire De Beers, The World’s Largest Diamond Mining Brand
“The macroeconomic outlook for the whole of 2025 remains fragile, with GDP projected to contract by 0.9%. This forecast reflects continued weakness in the diamond sector,” Gaolathe said.
He also warned of rising debt risks, noting that “persistent fiscal imbalances have necessitated increased borrowing, leading to a structurally higher debt trajectory.”
To address the situation, the government has introduced austerity measures aimed at controlling expenditure, including limiting civil servants’ overtime allowances and imposing a moratorium on domestic and foreign travel.
Gaolathe added that additional austerity measures would be announced in next year’s budget to redirect funds toward areas with potential for future growth.
Don’t Miss This:
Botswana Unveils Citizenship-by-Investment Program To Ease Reliance On Diamonds
Image Credit: Reuters
