Botswana: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Botswana

International Monetary Fund

No 2025/325, IMF Staff Country Reports from International Monetary Fund

Abstract: The 2025 Article IV Consultation discusses that Botswana’s economic outlook has deteriorated markedly over the last twelve months as the decline in the demand for natural diamonds has been sharper—and is expected to be more persistent—than anticipated. As a result, economic activity is expected to contract by 1 percent this year, before gradually recovering over the medium term. The authorities have begun taking steps to address the difficult economic situation, including the adoption of the Botswana Economic Transformation Program, some fiscal consolidation measures, and adjustments to monetary and exchange rate policies. Unless additional fiscal consolidation and economic diversification reforms are adopted and monetary policy is tightened, public debt could rise sharply over the medium term while persistent external current account deficits and external outflows would contribute to a further decline in reserves. Given the sharp downturn in the resource sector, bottlenecks to private sector-led growth and job creation need to be addressed urgently, with a focus on improving subject matter expertise credit access, labor market flexibility, trade liberalization, governance reforms, and land ownership reform.

Keywords: article IV consultation; Botswana's de jure; currency of Botswana; facto exchange rate arrangement; IMF's article; Exchange rates; Fiscal consolidation; Financial sector; Exchange rate arrangements; Global; Southern Africa (search for similar items in EconPapers)
Pages: 87
Date: 2025-12-08
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