Botswanas Economy Shrinks 20.3% as Gem Sales Plunge

botswana_diamondsBotswanas economy contracted 20.3 percent in the first quarter from a year ago as the global recession slashed diamond sales in the worlds biggest producer of the gems.
(Pictured: Jwaneng, the world's largest diamond mine).

Gross domestic product declined after expanding 1.9 percent in the fourth quarter of 2008, the Central Statistics Office said in a statement today in the capital, Gaborone. The mining industry plunged an annual 68.6 percent in the first quarter, after shrinking 10.1 percent in the previous three months.

Debswana, the joint venture between De Beers and Botswanas government, said on Feb. 23 it will keep all four of its mines in the country shut until April 14 to cut costs after diamond sales collapsed. The mines account for 70 percent of Botswanas exports.

Exports plunged 67 percent in the first quarter from the previous three months, after declining 18.2 percent in the fourth quarter, the statistics office said.

The International Monetary Fund said on April 22 the economy will probably contract 10.4 percent in 2009. Botswanas government secured a $1.5 billion loan from the African Development Bank in June, the first time it has turned to the African lender in 17 years.


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