World Bank sees Botswana economy rebounding 3.4% in 2026

The World Bank expects Botswana’s economy to rebound sharply in 2026, with growth projected to accelerate to 3.4 percent after two consecutive years of contraction.

In its October 2026 Africa Economic Update , the World Bank estimates that Botswana’s economy contracted by 2.8 percent in 2024 and 0.7 percent in 2025 before returning to growth this year.

The recovery is expected to moderate thereafter, with growth projected at 2.5 percent in 2027 before strengthening to 3.1 percent in 2028. The outlook suggests that while the economy is set for a strong rebound in 2026, the pace of expansion will ease significantly thereafter.

Botswana’s projected recovery is among the largest improvements expected across Sub-Saharan Africa. The World Bank projects growth to accelerate in 21 of the region’s 47 economies, with Botswana recording a 4.2 percentage-point acceleration, second only to Equatorial Guinea.

The report attributes the broader improvement across the region to stronger commodity-sector performance, improving macroeconomic conditions and country-specific recoveries from recent shocks.

The recovery comes as the wider Sub-Saharan African economy strengthens, with regional growth projected to increase from 4.1 percent in 2025 to 4.3 percent in 2026.

However, the improved growth outlook is accompanied by renewed inflationary and fiscal pressures.

Consumer price inflation in Botswana is projected to rise sharply to 8.0 percent in 2026, from 2.7 percent in 2025. It is then expected to moderate to 5.0 percent in 2027 and 4.5 percent in 2028.

Botswana is among a small group of countries where inflation is expected to increase by more than three percentage points in 2026. The World Bank attributes the renewed inflationary pressure across the region largely to higher global commodity prices, particularly energy, food and fertiliser costs, which have increasingly fed into domestic prices in import-dependent economies.

The global energy shock has also prompted a policy response from Botswana.

According to the report, the government responded to the 2026 energy shock by introducing measures including reducing travel by public officials to conserve energy and suspending the fuel levy, security of supply levy and road levy to support consumers.

The World Bank notes that most Sub-Saharan African economies are net energy importers, meaning higher international energy prices increase import bills, put pressure on foreign-exchange reserves and raise living and operating costs for households and businesses.

The pressure has also influenced monetary policy.

The World Bank said the Bank of Botswana maintained a relatively tight monetary policy stance, alongside Mauritius and Rwanda, as authorities sought to strengthen resilience against external shocks and prevent renewed inflationary pressures from becoming entrenched.

The report shows Botswana’s monetary policy rate at 5.5 percent, after a cumulative two-percentage-point increase during the year.

The fiscal outlook presents another challenge.

The World Bank forecasts Botswana’s general government deficit at 5.9 percent of GDP in 2026, before narrowing to 3.6 percent in 2027 and 2.8 percent in 2028.

Government debt, however, is projected to rise from 31.3 percent of GDP in 2025 to 39.1 percent in 2026, before reaching 40.6 percent in 2027 and easing to 38.0 percent in 2028.

The report also highlights Botswana as an example of how digital systems can improve public financial management.

It says digitally enabled royalty-management systems in Botswana are being used to track diamond revenues from extraction to the Pula Fund, improving revenue transparency, reducing leakage and creating auditable records of government mineral income.

Botswana also features in the World Bank’s assessment of Africa’s readiness for artificial intelligence.

The report notes that an internet-enabled device costs around 3 percent of monthly gross national income per capita in Botswana, compared with significantly higher costs in poorer African economies.