{
  "title": "Public Information Notice: IMF Executive Board Concludes 2010 Article IV Consultation with Botswana",
  "publication": "IMF News, August 27, 2010",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn10119",
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  "summary": "Each Public Information Notice contains a background section, a table of selected economic indicators, and an Executive Board assessment.",
  "publishDate": "2010-08-27",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Publication: Public Information Notice (PIN) No. 10/119\n- Date: August 27, 2010\n- Context: Executive Board concluded the Article IV consultation with Botswana on a lapse of time basis (concluded July 27, 2010).\n- Main point: Botswana is recovering from its worst recession in at least 40 years, with policy shifts from short-term demand support toward medium-term consolidation and structural reform."
    },
    {
      "heading": "Macroeconomic outlook and risks",
      "content": "- Findings:\n  - Economy contracted by 3.7 percent in 2009.\n  - Nonmining sector grew by 6.2 percent in 2009.\n  - Real GDP projected to reach 8.4 percent in 2010, led by a rebound in diamond production.\n  - Nonmineral GDP growth expected to slow to 4.8 percent in 2010.\n  - Inflation increased to 7.8 percent in May 2010; expected to possibly rise a little further before falling back within the Bank of Botswana’s objective of 3–6 percent in mid-to-late 2011.\n  - Current account balance set to improve gradually as diamond market recovers.\n- Risks:\n  - Downside: A double-dip recession in advanced economies could renew diamond market difficulties.\n  - Upside: Stronger-than-expected demand from China and India could boost diamond recovery.\n  - Regional sensitivity: Developments in South Africa will influence SACU revenue-sharing receipts and power-sector investment prospects."
    },
    {
      "heading": "Fiscal and monetary policy assessment",
      "content": "- Executive Board endorsement:\n  - Past prudent macroeconomic management enabled timely easing of fiscal and monetary policies during the crisis.\n  - Substantial fiscal consolidation will be needed as recovery proceeds to restore sustainability and safeguard external stability.\n  - Much adjustment should come from lower public spending due to a declining trend in mineral revenues; scope for raising nonmineral taxes is limited by the size of the private sector.\n  - The 2010/11 budget makes a good start; plans to balance the budget by 2012/13 and register modest surpluses thereafter are described as ambitious but warranted.\n  - Recent increases in public debt and a more challenging fiscal environment require a clearer framework for managing the government’s assets and liabilities.\n  - Anchoring inflation expectations is important; authorities should err on the side of caution before further reductions in interest rates and proceed with envisaged fiscal consolidation."
    },
    {
      "heading": "Structural reform and medium-term recommendations",
      "content": "- Medium-term growth projection:\n  - Staff projects real GDP growth will average about 6 percent over the medium term, assuming planned fiscal consolidation and recovery of diamond production and power-sector investment.\n- Policy priorities (\"principle objectives\"):\n  - Doing more with less:\n    - Increase value for money of public spending programs.\n    - Strengthen public financial management, including transition to program-based budgeting and implementation of a medium-term expenditure framework.\n  - Letting the private sector lead:\n    - Promote structural reforms to encourage entrepreneurship and investment, with emphasis on cross-cutting reforms that benefit the whole economy.\n    - Current investments in power generation to address a key bottleneck.\n    - With safeguards, privatization of selected parastatals, greater use of public–private partnerships, and rationalization of commercial services provided by government could mobilize greater private sector participation."
    },
    {
      "heading": "Key statistics (2007–2010, as reported)",
      "content": "- National income and prices (annual percentage change unless otherwise indicated):\n  - Real GDP: 2007: 4.8; 2008: 3.1; 2009: -3.7; 2010 Prel./Proj.: 8.4\n  - Minerals: 2007: -2.0; 2008: -20.9; 2009: 16.8\n  - Non-mineral: 2007: 9.7; 2008: 7.5; 2009: 6.2\n  - Consumer prices (average): 2007: 7.1; 2008: 12.6; 2009: 8.1; 2010 Prel./Proj.: 6.7\n  - Consumer prices (end of period): 2007: 13.7; 2008: 5.8; 2009: 6.6\n  - Nominal GDP (billions of pula)1: 2007: 76.0; 2008: 91.7; 2009: 83.2; 2010 Prel./Proj.: 92.7\n  - Diamond production (millions of carats): 2007: 33.6; 2008: 32.3; 2009: 17.7; 2010 Prel./Proj.: 23.2\n- External sector:\n  - Exports of goods and services f.o.b. (US$): 2007: 11.1; 2008: -3.2; 2009: -23; 2010 Prel./Proj.: 14.9\n  - Exports—Diamonds: 2007: -1.5; 2008: -8.1; 2009: -30.3; 2010 Prel./Proj.: 20.6\n  - Imports of goods and services f.o.b. (US$): 2007: 29.1; 2008: 24.9; 2009: -9.7; 2010 Prel./Proj.: 10.0\n- Money and banking:\n  - Net foreign assets: 2007: 24.1; 2008: 20.1; 2009: -18.5\n  - Net domestic assets: 2007: 17.0; 2008: 19.0; 2009: -37.8; 2010 Prel./Proj.: -10.8\n  - Broad money (M3): 2007: 31.2; 2008: 21.1; 2009: -1.8; 2010 Prel./Proj.: 16.1\n  - Velocity (nominal GDP relative to M3): 2007: 1.4; 2008: 1.6; 2009: 1.5\n  - Credit to the private sector: 2007: 25.7; 2008: 26.6; 2009: 10.3; 2010 Prel./Proj.: 11.4\n- Central government finance (Percent of GDP, unless otherwise indicated):\n  - Total revenue and grants: 2007: 35.8; 2008: 34.0; 2009: 31.6; 2010 Prel./Proj.: 34.9\n  - Total expenditure and net lending: 2007: 31.1; 2008: 39.3; 2009: 46.0; 2010 Prel./Proj.: 41.3\n  - Overall balance (deficit –): 2007: -5.2; 2008: -14.3; 2009: -6.4\n  - Non-mineral primary balance (percent of non-mineral GDP)3: 2007: -16.7; 2008: -28.5; 2009: -32.9; 2010 Prel./Proj.: -24.2\n  - Current account balance: 2007: 14.5; 2008: 3.5; 2009: -2.1; 2010 Prel./Proj.: -0.3\n  - Balance of payments: 2007: 13.9; 2008: 11.0; 2009: -12.9; 2010 Prel./Proj.: 5.4\n  - Total external debt4: 2007: 3.7; 2008: 3.2; 2009: 15.4; 2010 Prel./Proj.: 15.9\n- Reserves and debt (in millions of US Dollars, unless otherwise indicated):\n  - Change in reserves (increase –): 2007: -1,718; 2008: -1,490; 2009: 1,503; 2010 Prel./Proj.: -678\n  - Gross official reserves (end of period): 2007: 9,743; 2008: 9,125; 2009: 8,678; 2010 Prel./Proj.: 9,382\n  - Reserves in months of imports of goods and services5: 2007: 20.9; 2008: 21.7; 2009: 18.8; 2010 Prel./Proj.: 20.0\n  - Reserves in percent of GDP: 2007: 78.7; 2008: 67.5; 2009: 74.3; 2010 Prel./Proj.: 75.1\n\nIMF Public Information Notice No. 10/119, August 27, 2010.\n\n---\n\n\n References\n\n- Botswana and the IMF\n- Public Information Notices\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/pn10119"
    }
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    "Published: August 27, 2010",
    "Publication: Public Information Notice (PIN) No. 10/119",
    "Date: August 27, 2010",
    "Context: Executive Board concluded the Article IV consultation with Botswana on a lapse of time basis (concluded July 27, 2010).",
    "Main point: Botswana is recovering from its worst recession in at least 40 years, with policy shifts from short-term demand support toward medium-term consolidation and structural reform.",
    "Findings:",
    "Risks:",
    "Executive Board endorsement:",
    "Medium-term growth projection:",
    "Policy priorities (\"principle objectives\"):",
    "National income and prices (annual percentage change unless otherwise indicated):",
    "External sector:",
    "Money and banking:",
    "Central government finance (Percent of GDP, unless otherwise indicated):",
    "Reserves and debt (in millions of US Dollars, unless otherwise indicated):",
    "[Botswana and the IMF](http://www.imf.org/external/country/BWA/index.htm)",
    "[Public Information Notices](https://www.imf.org/en/news/searchnews)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](https://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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