Home » News » Business » GDP grew by 4.4% in 2014

GDP grew by 4.4% in 2014

Publishing Date : 01 June, 2015

Author :

Water, Electricity sector slows down economy

Botswana’s Gross Domestic Product (GDP) grew by 5.3% in q4 2014 according to data from Statistics Botswana. The slower than expected growth was mainly led by decline in growth from the mining sector which is the largest contributor to the economy – analysts at Motswedi Securities have observed.

According to a Motswedi Securities quarterly economic bulletin, the mining sector posted a 2.5% growth as compared to 10.4% registered the previous quarter. The same report reveals that the Trade, Hotels & Restaurants sector which is the 2nd largest contributor grew by 7.8% while the Finance & Business Service sector advanced by 5%, slower than the revised 7.8% posted in the previous quarter.

“On a different note, The Water & Electricity sector which has been dragging economic growth, suffered a -236.4% the lowest figure during the year 2014. For the year 2014, GDP growth was 4.4% relatively lower than the 9.3% (revised) recorded in 2013 despite the stronger performance from the Jwaneng mines during q3; where higher grade carats were produced.

This slower growth was also attributable to the Water & Electricity sector which registered the only negative growth (of -18.5%) during 2014. The Trade, Hotels & Restaurant posted the 2nd largest growth of 7.1% reflecting the resilience of some of the developed economies such as the US,” reads the Motswedi securities economic brief.

Going forward, analysts at Motswedi Securities anticipate volatility from the Mining sector which remains subjective to developments on the international markets, mainly the health of the US economy and some of the developed economies. Eurozone recently initiated a stimulus program in order to propel the 19 nation economy.

“We remain concerned about the persisting Greece crisis which has stoked fears about a potential default and ultimately withdrawal from the Eurozone as this could pose a threat to our diamond sales. Meanwhile Chinese growth has been fragile with recent GDP figures coming short of expectations. We could see the People Bank of China heading the direction of starting a quantitative easing scheme in order to steer growth.”

However, Motswedi Securities analysts emphasise that the Water and Electricity sector remain a major concern as power and water supply particularly in Gaborone, the capital city remain a challenge within the country.

“The central bank recently reduced the bank rate by 100 basis points to 6.5% in line with the downtrend of our inflation. We expect the lower rate to boost economic growth and driving the Finance & Business Services sector which contributes the 4th largest weight to Botswana GDP,” concludes the report.



Do you think the courts will help put the UDC, BMD impasse within reasonable time ahead of the 2019 General Election?