Moody Investor Service has projected that Botswana’s real Gross Domestic Product (GDP) will grow by a bold 7 percent in 2012 and 2013. The prediction however contradicts views held by local economists who forecast a bleak economic picture for the mineral led economy.
Local economic observers have raised concerns that economic growth is likely to drop owing to a decline in diamonds trade. In February, finance and development planning minister, Kenneth Matambo said the economy is expected to grow by 4 percent in 2012. Botswana relies heavily on diamonds for revenue.
Last week Debswana’s Managing Director painted a very bleak future for the industry, saying unless the global economy improves dramatically, diamond trade will face challenges.
Moody said average inflation for 2012 is expected to reach 8,4 percent. Inflation, which measures prices increasing, has been on the increase in the past months breaching the central bank’s plans to achieve a 3-6 percent objective. In October, inflation remained unchanged at 7.1 percent.