Monday, August 23, 2010

Botswana at little risk of debt distress - IMF

According to the Mmegi Newspaper (Friday, 20 August 2010) the International Monetary Fund (IMF)has reported that despite the rapid build-up of external debt in 2009, Botswana is at little risk of debt distress.
In a report following consultations between government officials and the Fund's staff, the IMF says external debt for Botswana is expected to reach nearly 50 percent of the GDP by 2012, to finance construction of two power stations, but should stay below 60 percent of GDP in stress test scenarios.

"Public debt would rise to 25 percent of GDP in 2010, before falling to 15 percent by 2014," the report says. "If growth and the primary balance were to return to recent levels, however, Botswana would be able to repay its public debt by 2012." According to IMF statistics, Botswana's gross external debt stood at $1.2 billion (11.2 percent of GDP) at the end of 2008, with short-term debt accounting for one-fifth of total external debt. The initial increase in 2009 is also explained by the projected 10.3 percent contraction in real GDP due to significantly lower diamond production. Click here to read more. IMF Report URL:

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