Trade deficit sinks further

Mbongeni Mguni | Thursday February 1, 2024 12:17

 

Under pressure: Lower revenues from diamond sales are impacting the trade balance as well as budget revenues

Statistics Botswana figures estimate that diamond exports in November dropped to P1.3 billion, from a revised P2.4 billion in October, pushing down overall exports from P3.9 billion to about P3 billion. Diamonds accounted for about 60% of exports in October and just over 44% in November.

According to Statistics Botswana data, diamond exports last year slowed from a peak of P7.3 billion in March, to November’s low of P1.3 billion. The merchandise trade deficit, or the relationship between the country’s exports and imports of goods, was at a surplus of P2.9 billion at the end of the third quarter.

However, after the October and November figures, the trade balance for the year to November sank to a deficit of P8.4 billion. Economists associate prolonged trade deficits with depletion of countries’ foreign reserves, weakening of currencies and stronger need for external debt.