Botswana: 2024 Article IV Consultation-Press Release and Staff Report

Botswana: 2024 Article IV Consultation-Press Release and Staff Report
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Volume/Issue: Volume 2024 Issue 286
Publication date: September 2024
ISBN: 9798400288135
$20.00
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Topics covered in this book

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Finance , Economics- Macroeconomics , Public Finance , Natural Resources , IMF's article , OPEC Fund for International Development , project obligations to fund , objective range , diamond market contraction , IMF team , Non-renewable resources , Financial sector stability , Global , Southern Africa , Africa

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Summary

The 2024 Article IV Consultation discusses that Botswana’s economic growth is expected to slow to 1 percent in 2024 primarily because of a diamond market contraction, before picking up next year. Inflation has declined sharply since the peak of mid-2022 and returned to the central bank’s medium-term objective range of 3–6 percent, where it is expected to remain in the medium term. Some fiscal relaxation is warranted this year given the fall in mineral revenues, but the ambitious capital budget should be streamlined to contain the deterioration of the deficit and prioritize projects with the highest value for money. The monetary policy stance is appropriate, but monetary policy transmission remains limited, requiring further deepening of the interbank, credit, and government bond markets along the transmission chain. Reducing inequality and unemployment requires a more job-intensive, private sector-led, and export-oriented growth model. Reform of state-owned enterprises, improved infrastructure for doing business (internet, energy, and logistics), trade facilitation measures, and a more efficient social protection system should be prioritized.