February 8, 2005
Economy registers strong positive growth

GABORONE - The national economy registered a strong positive growth rate of 5.7 per cent during the 2003/2004 year, although at a slower pace than during the previous year.

Presenting the 2005/06 budget yesterday,finance and development planning minister Baledzi Gaolathe, said the gross domestic product (GDP) at current market prices increased to P39.9billion in 2003/2004.

The slower growth rate was largelybecause of lower output growth in the mining sector, at 6.9 per cent compared to 10.3 per cent in the previous year.

Gaolathe said GDP growth was expected to slow down to between four and five per cent in both 2004/2005 and 2005/2006, due mainly to slower growth in mining and non-mining sectors.

"This outlook poses significant challenges for the domestic economy's development prospects," he said. "Unless there is a concerted effort to improve productivity levels, it would be difficult to meet the Millennium Development Goals and the ideals of Vision 2016." Regarding employment, Gaolathe referred to the 2002/2003 Household, Income and Expenditure Survey, which says 76 per cent of the total labour force was employed.

Unemployment stood at 23.8 per cent. The formal sector employment increased by 11 005 jobs, which has doubled the additional formal sector jobs added the previous year.

The pass through of the effect of the introduction of VAT on the consumer price index, as well as the catch up of a number of administered prices to reflect costs, had pushed up inflation from an average of about six per cent before the introduction of VAT to an average of 9.2 per cent in 2003.

The average inflation for 2004 was seven per cent.

From February when the Pula was devalued by P7.5 per cent to December 2004, the Pula has appreciated by 12.8 per cent against the US dollar, while depreciating by four per cent against the Rand. BOPA