Botswana's economic output fell in the second quarter, reflecting a decline in output from its key diamond industry, data from the statistics agency showed on Friday.
Gross domestic product decreased 5.3% in year-on-year terms, the steepest quarterly contraction since the COVID-19 pandemic.
"Diamond production in carats declined 43.1% in the second quarter of 2025. The steep decline reflects the diamond companies continued effort to scale down operations amid sluggish global demand," the statistics agency said in a report.
Botswana cut its 2025 economic growth forecast to almost zero due to a prolonged downturn in the global diamond industry, a senior financial ministry official said Monday, with the budget deficit also seen widening due to reduced diamond revenue.
Diamond value
Botswana is the world's leading producer of diamonds by value and its economy largely depends on diamond exports, which normally contribute around 30% of national revenues and 75% of foreign exchange receipts.
In the 2025 budget, announced in February, finance minister Ndaba Gaolathe had projected 3.3% growth this year based on an expected rebound in the diamond market.
For the 2025/26 financial year, running from April to March, he had forecast a budget debit of 7.56% of gross domestic product, lower than the last financial year's estimated deficit of 9% of GDP.
