Cornelius Dekop, governor of the central bank of Botswana, says the economy is still in a recession following the third consecutive quarter of GDP decline. declined by 4.3% in the third quarter of 2024 and 5.2% and 0.4% in the first and second quarters of 2024 respectively.
"The contraction in economic activity is mainly attributable to the decline in diamond mining output and revenues. This contraction is further compounded by the weaker performance in non-mining sectors. As a result, export earnings declined, constraining government spending and dampening overall economic activity in the second half of 2024," announced the governor.
Dekop also announced that the Monetary Policy Committee (MPC) had decided to maintain the Monetary Policy Policy at 1.9%. The decision was driven by the fact that the economy is expected to operate below full capacity in the short term, ensuring that inflation stayed within the apex bank's 3-6% range.
Headline inflation increased from 1.7% in December 2024 to 2.5% in January 2025, remaining below the lower bound of the objective range.
The next MPC meeting is scheduled for April 17th.