Botswana’s government now forecasts an economic contraction of almost 1% this year as its key diamond sector continues to struggle, its finance minister said in a budget review on Friday.
When the main budget was presented in February the Southern African country’s government had hoped for a 3.3% gross domestic product (GDP) expansion this year, rebounding from last year’s 3% contraction.
But by mid-year it was projecting almost no growth as a prolonged downturn in the global diamond market showed no sign of abating.
Diamonds normally contribute around one-third of Botswana’s national revenues and three-quarters of its foreign exchange receipts.
“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,” Finance Minister Ndaba Gaolathe said.
“Debt risks are mounting as persistent fiscal imbalances have necessitated increased borrowing, leading to a structurally higher debt trajectory,” he added.
Gaolathe said
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