Forecasts for the world economic recovery have been revised to a 3.5% rise in the second half of 2009.



According to the latest BIFM quarterly economic review, growth for the whole year is still likely to be negative due to the shockwaves of the recession in the first half of the year, but the pace of recovery should be sustained into 2010.



The review’s author, Dr Keith Jefferis, notes that emerging economies are growing faster than developed economies and this trend is likely to continue for the foreseeable future.



According to the review, the most direct impact on Botswana is being felt through the diamond sector, but as the global economic recovery has gained momentum, the global diamond market has also picked up to a certain extent.



Positive developments include improved credit availability that has enabled diamond cutters, polishers, wholesalers and retailers to re-stock.



The report states that activity in the retail jewelry market has revived, but jewelry sales remain weak and are still well below the 2007-8 levels, especially in the USA which continues to be the world’s largest diamond market.



The recovery in the demand for rough diamonds indicates demand for re-stocking but not necessarily buoyant retail demand, so that it may therefore be short-lived. Rough diamond prices have also recovered, due to a combination of improved demand and reduced supply levels.

Nevertheless, with the return of major producers such as Debswana (De Beers) and Alrosa to the market, prices may soften again, especially if demand remains uncertain.



The BIFM review notes that positive developments in the global diamond industry have helped boost Botswana’s diamond exports which have bounced back energetically since April.



During the three months from April to June, diamond exports averaged P1.58 billion a month, not far below the monthly average of P1.75 billion during the same period of 2008.