Mmegi states that despite the impact of the current global economic crisis on Botswana's diamond sector, the country is not yet in recession.

At the release of the Bank of Botswana's 2008 Annual Report, Head of Research, Andrew Motsumi noted that the latest figures from the Central Statistics Office (CSO) indicated that Botswana's GDP was standing at 2.9% in the last quarter of 2008, meaning that the country is still in a state of positive economic growth.

Motsumi stated, however, that it is likely that the country will slide into negative growth as the global crisis continues to squeeze Botswana's revenue while diamond production dwindles.

Central Bank Governor, Linah Mohohlo, is quoted as saying that Botswana cannot avoid the recession as some of the largest economies in the world are already in the red.

She noted: "In 2009, the world economy is expected to contract by 1.3%, Europe – by 4.8% and Japan by 6.2%. The effects of this have taken a little long to reach here but we are expecting to record negative growth very soon."

Due to plummeting diamond demand, Botswana is now importing more than it is exporting leading to a trade deficit balance.

In 2008, the country recorded a current account surplus of P8.7 billion, which was a 19.4% decline from P10.8 billion in 2007. Overall external balance fell by 3.2 billion from P10.7 billion in 2007 to P7.5 billion in 2008.

Trade deficits have been recorded since October, while diamond revenues slumped heavily, particularly in the last quarter of 2008.