Monday, February 26, 2024

Botswana’s economy contracts in QII

Botswana’s economy contracted by 0.4 percent quarter-on-quarter in the three months to end-June, versus a revised 1.8 percent contraction in the QI:2015, data released by the statistics office showed Tuesday.

On a year-on-year basis, gross domestic product (GDP) growth was at 2.5 percent in QII from a revised 3.8 percent in QI. The Statistics Botswana report shows that Botswana’s GDP went up 2.5 percent in the second quarter of 2015 compared to 3.4 percent realized in the same quarter in 2014. On sectors, the SB data shows that the GDP estimates at current and constant prices for QII: 2015 have seen declines in mining, water and electricity sectors. There was a significant decrease of 41.1 percent in the value added by the water and electricity sectors during QII of the year under review. The decline was largely caused by the electricity sector which has been contributing negatively to the economy since QI: 2012 due to a substantial increase in intermediate consumption. The electricity value went down by 130.8 percent during the quarter under review, as electricity imports went up 32.2 percent while local electricity generation decreased by 16.3 percent.

“Imported electricity is part of intermediate consumption. The value added by the water sector also decreased by 4.1 percent. There is currently water shortage in the country which has led to water rationing,” read the SB report.

At industry level, most of the increase was due to trade, hotels and restaurants, finance and business services and general government sectors which increased by 6.9, 5.8 and 5.8 percent respectively. Still on the quarterly report, the mining value added decreased by 8 percent compared to a three percent decline realized in the second quarter of 2014, where the negative growth rate of the mining sector was attributed to a decline of 5.7 percent in diamond production in the quarter under review. Copper/nickel production decreased by 12.9 percent in QII: 2015 compared 21.3 percent recorded in QII: 2014. Also, the closure of Discovery Metals Limited’s Boseto copper mine in March 2015 contributed to the decline in copper/ nickel production. Still during the period under review an increase of 5.8 percent recorded by the finance and business services sector was due to the increase in banks and real estate, which registered growth of 8.5 and 6.7 percent respectively.


Read this week's paper