Botswana’s economy is expected to expand by 4.5% this year, down from an estimate in February of 5.3%, the finance ministry said on Tuesday at a 2019 budget conference.
A senior official in the diamond-producing southern African nation’s economy said the government expects an optimistic medium term outlook, with growth forecasts expected to rise moderately to 4.2% in 2019.
Deputy secretary for macroeconomic policy in the ministry of finance Kelapile Ndobano did not specify the sectors that had led to the downward revision in economic growth projections in 2018. Growth stood at 2.4% in 2017.
Ndobano also said Botswana sees its budget deficit widening for the current financial year to 2.3% of GDP from 1.8% of GDP announced in February.
Botswana has been running deficits for the past three years and expects the trend to continue until 2021, with the 2019 shortfall seen rising slightly to 2.4% of GDP.
To finance the 2019 deficit, government says it will borrow, both domestically and externally.
The wider deficit is largely due to a downward revision in anticipated minerals revenues as a result of a decision by the country’s largest diamond miner, Debswana, to start the implementation of some major projects during the current financial year.