Botswana firms have said that they expect Botswana’s overall output to expand by 3.8 percent in 2022, below the projections of 4.2 percent by the Ministry of Finance and 4.1 percent by the International Monetary Fund (IMF) for the same period.
The quarterly survey collects information from a sample of 100 businesses from the thirteen economic sectors, with respondents sharing perceptions about the health of the economy and expectations by responding to questions on, among others: the prevailing business climate; outlook for economic growth and inflation; and business performance in the survey horizon. The response rate for the current survey was 57 percent compared to 56 percent in the second quarter survey with local companies which participated sharing that on quarterly basis, they expect Gross Domestic Product (GDP) to increase by 3.6 percent and 4 percent in the third and fourth quarters of 2022, respectively.
The survey shows that firms in the Construction and Real Estate and Retail, Accommodation, Transport and Communications sectors were pessimistic about economic growth prospects in the third quarter of 2022, while Mining and Quarrying; Manufacturing; and Finance, Professional and Administrative Activities were optimistic. Positive sentiments in the Mining & Quarrying sector mainly reflect the expected continued favourable conditions in the global diamond market and elevated prices in other commodities markets.
The BES also shows that export-oriented firms are also optimistic about business conditions in the third quarter of 2022. However, their optimism declines in the fourth quarter of 2022 and they become pessimistic about the 12-month period to September 2023, possibly due to the expected disruptions in the world markets and inflationary pressures arising from the ongoing Russia-Ukraine war.
Firms’ expectations about domestic inflation increased compared to the previous survey and have surpassed the Bank’s 3 – 6 percent objective range in both 2022 and 2023, averaging 12.5 percent for 2022 (8.5 percent in the previous survey) and 10.5 percent for 2023 (7.9 percent in the previous survey).