botswana

After registering a contraction in GDP of -8.7% in 2020 and growth of 11.4% in 2021, Botswana is estimated to have grown by 4.1% in 2022, based on a continued reactivation of economic activity, domestic demand and an acceleration in commodity prices.

With regard to the inflation rate, there is an upward trend, with 1.9% in 2020, 6.7% in 2021, and an estimated increase to 11.2% in 2022. As inflationary pressures have increased, the Bank of Botswana has been tightening monetary policy. It is expected to decelerate to 5.8% in 2023 and to stabilise at around 4.6% in the following years. On the other hand, the public deficit is expected to increase due to higher public spending to protect families against higher inflation.

Despite predicted GDP growth of around 4% from 2022 onwards, growth prospects remain unstable. This vulnerability is substantially related to substantive poverty levels, unemployment, deep social inequalities and Botswana's dependence on diamond exports.