Botswana’s last quarter ending June was disastrous for the economy with Gross Domestic Product (GDP) falling by 20 percent, but analysts say the scenario is beginning to turn around.
The managing director of Investec, Martinus Seboni, told FNBB clients that financials are going to play a leading role in the recovery.
“We think that earnings will provide direction and they (earnings) will surprise on the upside considering the macro economic backdrop,” he stated.
Seboni, speaking at the launch of FNBB Private Bank that will service the upper end of the market, said economists predict that global GDP will decline in 2009 and recover in 2010.
“Things are beginning to turn around. The June inflation surprised on the downside and I think it will be above the range and settle around seven percent,” he said.
“We think there is room for more interest rate cuts. Our currency has strengthened against the US Dollar and that will provide a cushion against high oil prices,” Seboni anticipated.
He added that global equities have recovered significantly from recent lows saying the recent quarter has been the best compared to 2008 when the market was down 50 percent.
Globally, stock markets that bottom before the general economy have begun to go up. Equities and markets are leading indicators and they have “shown that we will soon be out of the recession”.