Botswana’s economy contracted in Q1

Botswana’s economy contracted after diamond production dropped. Gross domestic product shrank an annual 5.3% in the first quarter, compared with growth of 1.9% in the prior three months. The downturn, according to Statistics Botswana was primarily influenced by a decrease in real value added of the diamond traders and mining & quarrying industries of 46.8% and 24.8% respectively.

Botswana is the world’s largest producer of rough diamonds by value, with the revenues making up the bulk of the southern African country’s budget receipts. Bloomberg Africa reports that the decline is likely to make meeting its fiscal targets for this year difficult. The central bank already warned last week that the government would probably miss its economic growth forecast of 4.2% because of weaker mining output.