## IMF Staff Completes 2023 Article IV Mission to Botswana

_IMF News, July 14, 2023_

## Source details

**Canonical URL:** [IMF Staff Completes 2023 Article IV Mission to Botswana](https://www.imf.org/en/news/articles/2023/07/14/pr23263-botswana-imf-staff-completes-2023-article-iv-mission-to-botswana)

## Other formats

- [Markdown version](/en/news/articles/2023/07/14/pr23263-botswana-imf-staff-completes-2023-article-iv-mission-to-botswana/index.md)
- [Structured JSON version](/en/news/articles/2023/07/14/pr23263-botswana-imf-staff-completes-2023-article-iv-mission-to-botswana/index.json)
- [Bundle manifest](/en/news/articles/2023/07/14/pr23263-botswana-imf-staff-completes-2023-article-iv-mission-to-botswana/bundle-manifest.json)

## Bibliographic details
- Published: July 14, 2023

---

### Recent economic performance
- Growth:
  - "Almost 12 percent growth in 2021"
  - "5.8 percent in 2022"
  - Long-run average: "4 percent"
- Drivers of recovery:
  - Elevated mining production
  - Robust manufacturing and construction
- Inflation:
  - Peaked at "14.6 percent in August 2022"
  - Fallen to "4.6 percent in June 2023"
  - Bank of Botswana’s medium-term objective range: "3 - 6 percent"
  - Lower oil prices caused a steep decline in transport inflation
- Fiscal position:
  - Improved from a "2.4 percent of GDP deficit in FY2021" to a "balanced budget in FY2022"
  - Improvement mainly due to measured expenditure growth and higher mineral revenue
- Monetary policy:
  - Bank of Botswana policy rate maintained at "2.65 percent since August 2022"
  - Prior increases: "a combined 151 basis points between April and August 2022"

### Outlook and projections
- Growth projections:
  - "Growth is expected to slow from 5.8 percent in 2022 to 3.8 percent in 2023"
  - Reasons: projected decline in diamond production and weaker global environment
  - Forecast: rebound gradually in 2024 and 2025, to above "4 percent" due to higher prices and quantities of diamonds produced
- Inflation projection:
  - "Monthly inflation is projected to remain within the Bank of Botswana’s medium-term objective range of 3 - 6 percent this year and next"
  - Factors: decline in international oil prices, positive real lending rates, prospect of regulated prices remaining unchanged
  - Policy implication: monetary stance appropriate, but central bank should be ready to raise the policy rate if inflation risks materialize
- Fiscal projection:
  - Fiscal deficit projected to widen by "about 2 percent of GDP in FY2023", mostly due to higher budgeted capital expenditure
  - Government plans to improve the fiscal position by "2½ percent of GDP" over the subsequent two years and achieve a small fiscal surplus by containing the wage bill and transfers
  - Emphasis: consolidation critical to preserve fiscal sustainability and support FX reserves
  - Concern: large depletion of government deposits in recent years and longer-term prospects of exhaustion of diamond resources call for fiscal prudence

### Monetary and financial sector assessment
- Monetary policy stance: described as appropriate given inflation developments
- Financial sector soundness:
  - "The financial sector is sound, stable, and resilient."
  - Recommendations to strengthen financial stability:
    - Operationalize frameworks for emergency liquidity assistance, deposit insurance, and bank resolution
    - Continue to enhance financial sector supervision
    - Deepen interbank and bond markets to support financial sector development
    - Improve public financial management and monetary policy transmission

### Structural reforms and policy recommendations
- Need for supply-side structural reforms to support diversification and increase the relative size of the private sector
- Expected outcomes: boost growth potential, reduce unemployment, enhance resilience to external shocks
- Policy priorities listed:
  - Trade facilitation and integration
  - Parastatal reform
  - More efficient and climate-resilient infrastructure investment
  - More targeted support for high-productivity, export-oriented sectors

### Mission details and statement
- Mission dates and leadership:
  - IMF team visited Gaborone from "July 4-14, 2023"
  - Mission led by Mr. Luc Eyraud, Division Chief in the IMF African Department and Mission Chief for the Republic of Botswana
- Nature of release:
  - End-of-Mission press release conveying preliminary findings; views are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board
- Closing remarks:
  - IMF staff thanked the authorities for the "highly constructive dialogue during the Article IV consultation."

*Press Release No. 23/263 — IMF Staff Completes 2023 Article IV Mission to Botswana*

---


## References

- [Botswana and the IMF](http://www.imf.org/external/country/BWA/index.htm)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2023/07/14/pr23263-botswana-imf-staff-completes-2023-article-iv-mission-to-botswana_