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GDP growth slows in 2019

GDP growth slows in 2019
GDP GROWTH DECELERATE: BoB

Gross Domestic Product (GDP) grew by 3.9 percent between June last year and June 2019.

This is according to Bank of Botswana’s Monetary Policy Report for the month of October which suggests which shows that when compared with the same period last, real GDP growth has decelerated.

In the corresponding period in 2019, real GDP grew by 4.9 percent.

This year’s lower increase in output is mainly attributed to a deceleration in output growth of the mining sector.

Mining output grew by 1.4 percent in the year to June 2019, compared to an increase of 5.6 percent in the same period last year.

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The lower increase in the mining industry is attributable to a major reduction in growth of the diamond industry output from 11.8 percent to 1 percent in the period under review.

The decrease in diamond output is linked mainly to the decline in production by Orapa Mine following a planned shutdown in April, 2019.

The expansion of output for Soda Ash which grew by 9.2 percent and other mining which grew 3.9 percent have reportedly partially offset the decline in growth of the diamond sector.

Non-mining GDP on the other side grew by 4.2 percent in the 12 month period to June 2019 compared to 4.8 percent growth in the same period last year.

According to the report, the lower growth in on-mining GDP was mainly due to a slower growth of the trade, hotels and restaurants sector due to weak performance in the downstream diamond industries.

Nonetheless, faster expansion of the transport and communications, finance and business services boosted overall growth of the non-mining sectors.

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Meanwhile, the report also suggests that the local property market remained weak in the first quarter of 2019.

The residential rental market is reported to have weakened in the first quarter of 2019 compared to the previous one, which is believed to be a reflection of a decrease in rentals for upper-end properties and weaker demand for middle-end properties.

However, the rental market is seemingly enjoying good demand and supply for properties in the lower-end and medium cost properties compared to the higher-end residential housing where demand is weaker.

In general, the average price for residential property sold in the first quarter of 2019 increased by 11.1 percent to p852 529 compared to the previous quarter which is a reflection of a higher demand for the lower-end and medium cost residential housing.

The demand for lower-end prime located residential housing is expected to improve further given affordability of properties in this category compared to others.

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