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Economic growth dependent on vaccine rollout – Pelaelo

Economic growth dependent on vaccine rollout - Pelaelo
BOB GOVERNOR: Moses Pelaelo

A rebound in economic activity will be largely dependent on a successful Covid-19 vaccine rollout.

This was said by the Bank of Botswana Governor, Moses Pelaelo during a media briefing on the Monetary Policy Committee (MPC) meeting on Friday last week.

Although the government has been criticized for the slow pace in rolling out the vaccine with less than 200, 000 people fully vaccinated to date since the programme started in March, vaccination is expected to play a key role in economic recovery.

The Ministry of Finance and Economic Development and the International Monetary Fund (IMF) has forecasted a rebound in economic growth for Botswana in 2021.

The ministry projects a growth of 8.8 percent in 2021, before moderating to a growth of 5.5 percent next year.

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The IMF on the other hand predicts the domestic economy to grow by 8.3 percent this year and moderate to 6.4 percent in 2022.

“The growth outcome will partly depend on the successful vaccine rollout,” Pelaelo has said.

The governor further explained that the global output growth is forecast at 6percent in 2021, reflecting expectations of strengthening economic activity in the latter part of the year, largely supported by additional financial support and the rollout of an effective COVID-19 vaccine.

“However, global output growth is anticipated to moderate to 4.9 percent in 2022, as some economies return to their pre-COVID levels.”

In South Africa, meanwhile, the country’s reserve bank projects the country’s GDP to register a growth of 4.2 percent in 2021 before slowing to 2.2 percent next year.

Pelaelo said it is worth noting that the short-term adverse developments in the domestic economy take place against a growth-enhancing environment.

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“This includes accommodative monetary conditions, improvements in water and electricity supply, reforms to further improve the business environment and government interventions against COVID-19, including positive news around the vaccination rollout programme.”

In addition, Pelaelo noted that successful implementation of the Economic Recovery and Transformation Plan (ERTP) should anchor the growth of the exports and preservation of a sufficient buffer of foreign exchange reserves which have recently fallen to an estimate of P50.8 billion.

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