The International Monetary Fund (IMF) has raised its forecast for growth in Botswana this year to 3.9 percent from an initial 3.6 percent, signalling improving confidence in the country’s economy.
The latest forecast is lower than the government’s, which in February announced a forecast of 4.2 percent growth for 2019. The revised IMF forecast, however, places Botswana above the sub-Saharan average of 3.5 percent and the SADC average of 2.4 percent for 2019. The latest revisions are contained in the IMF’s World Economic Outlook (WEO) released on Tuesday. Every year, the Bretton Woods institute releases the WEO in April before revising it in October.
Last April, the IMF had forecast Botswana’s 2019 growth at 4.5 percent before revising it down to 3.6 percent in its October update. The WEO is the world’s most authoritative research analysis on global economic trends, threats and forecasts, covering the IMF’s 189 member states, including Botswana. The latest forecast generally swims against a downgrade in the global growth forecast and similar reduction in the outlook for sub-Saharan Africa. The IMF shaved its forecast of global economic growth in 2019 by 0.1 percent to 3.6 percent, while cutting its forecast for sub-Saharan Africa by 0.3 percent to 3.5 percent. The IMF expects an improvement in the second half of this year.
“The current forecast envisages that global growth will level off in the first half of 2019 and firm up after that.
“The projected pickup in the second half of 2019 is predicated on an ongoing build-up of policy stimulus in China, recent improvements in global financial market sentiment, the waning of some temporary drags on growth in the euro area, and a gradual stabilisation of conditions in stressed emerging market economies, including Argentina and Turkey,” the IMF’s researchers said.
For sub-Saharan Africa, the researchers said prospects varied widely reflecting the heterogeneity of the economies, with factors influencing growth in 2019 disparities in the level of development, exposure to weather shocks and commodity dependence and others. For oil producers such as Nigeria and Angola, oil prices are expected to soften affecting growth, while for base metal producers such as Botswana, the IMF has noted the strengthening of demand since August “as a result of supply disruption in some metal markets more than offsetting subdued global demand”.