GDP up by 5.2 %

SHARE   |   Sunday, 20 July 2014   |   By Kabelo Adamson
GDP up by 5.2 %

Real Gross Domestic Product (GDP) has increased by 5.2 per cent in the first quarter of 2014. This is compared to an increase of 4.8 percent accrued in the same quarter of the previous year, while the estimated GDP at the current prices for the first quarter of 2014 was P32 710.3 million compared to a revised level of P31 652 million registered in the last quarter of 2013, recording an increase of 3.3 percent.

Information released by Statistics Botswana this week shows that at industry level, most of the increase was attributed to Mining and Trade, Hotels and Restuarants which increased by 10.7 and 7.9 percent respectively. The information suggests that the increase in value added of the mining sector was due to a 23.6 percent increase in the diamond production.
Scheduled  plant maintainance at the Orapa mine which yielded low production, recorded adverse contribution of the mining sector in the first quarter of 2013, whereas in the period under review the contribution was inspiring as production had normalized.

According to  the latest statistics, mining continues to be the largest contributor to  GDP, its contribution to GDP stands at 22.8 percent in the first quarter of 2014 followed by Trade,Hotels and General Governemnt at 15.3  and 14.5 percent respectively. All sectors have for the period under revie achieved positive growths  of more than 2 percent except for water and electricity sector which recorded of 103 percent following power cuts as a result of disfunctional Morupule B power plant as well as water restrictions which included scheduled water rationing.

However there was a slight improvement though still negative  in value added by the water and electricity sector compared to the same period in the previuos year after a decrease of 200.6 percent recorded in the fourth quarter of 2013, in the quarter under review the sector saw a decrease of 103.9 percent compared to a decrease of 31 percent recorded in the similar period in 2013.
The decline in the overall contribution of the sector is however blamed on the electricity sub-sector which is said to have been contributing negatively to the economy since first quarter of 2012 due to substantial increases in intermediate consumption.

Meanwhile on the consumption side, total final consuption expenditure recorded an increase of 2.2 percent in the first quarter of 2014 whereas in the same quarter of the previous year it increased by 1.1 percent. The household final consumption increased by 3.1 percent for the period while government fianl consumption rose by 5.8 percent in the quarter under review comapred to a decrease of 1.0 percent in the same period in 2013.

There is a positive growth for real exported goods and services as they went up by 33.7 percent as compared to an increase of 17.7 percent recorded in the same quarter of 2013 while imported of gpoods and services recorded a decline of 13.0 percent as compared to the 23.9 registered in the same quarter in the previous year.

Furthermore the information released by the parastatal for the Consumer  Price aindex for the month of June was 4.6 percent which is an increase of 0.1 percent  in the 4.5 percent recorded in May this year. The annual inflation for the month of  June was lower than the 5.8 percent recorded during the same month in April which means the rate falls within the inflation target set by the cental bank, Bank of Botswana (BoB) of 3-6 percent.

The downward movement  of annual inflation rate between June 2013 and June 2014 is linked to the decline on prices of commodities , especially the main components of Transport and Food and Non-alcohlic beverages which fell by 6.9 percent and 1.8 percent respectively.