Botswana: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Botswana
IMF Staff Country Reports, December 8, 2025
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- Botswana: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Botswana
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Bibliographic details
- Published: December 8, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229030533.002
Overview
- Botswana faces a critical juncture as weak demand for natural diamonds has increased the need to diversify sources of growth.
- Economic activity is expected to continue contracting this year, reflecting a further drop in diamond production and in non-mineral activity.
- Inflation is low and expected to stay within the objective range.
Macroeconomic outlook
- Economic activity: Expected to continue contracting this year due to:
- A further drop in diamond production.
- A contraction in non-mineral activity.
- Inflation:
- Low.
- Expected to stay within the objective range.
Fiscal position and public debt
- Fiscal deficit: Despite some austerity measures, the fiscal deficit is expected to increase to more than 8 percent of GDP this year.
- Public debt risk: Unless additional fiscal consolidation measures are adopted, public debt could rise sharply.
External sector and reserves
- Diamond exports: Weak outlook for diamond exports.
- Current account: Forecast to remain in deficit in the next few years.
- International reserves: Ongoing current account deficits are expected to contribute to a further decline in international reserves.
Financial sector conditions
- Overall soundness: The financial sector remains sound.
- Banking sector liquidity: Has tightened due to:
- The contraction in the diamond sector.
- Increased government financing.
- Higher capital outflows.
Policy implications and priorities
- Diversification: Increased need to diversify sources of growth beyond natural diamonds.
- Fiscal consolidation: Additional fiscal consolidation measures are implied as necessary to prevent a sharp rise in public debt.
- Reserve and external balance management: Addressing persistent current account deficits will be important to stabilize international reserves.
- Financial stability monitoring: Continued monitoring of banking sector liquidity given pressures from the diamond sector contraction, government financing needs, and capital outflows.
International Monetary Fund. Botswana: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Botswana.
Content in this bundle
- 1. Lab-Grown Diamonds