Botswana 2010 business confidence up - c.bank poll
05-01-2010

The central bank polled 100 businesses across sectors between September and November in 2009.

The bank said businesses revised their inflation expectations downwards compared with the previous survey. Inflation was seen averaging 9.6 percent and 10.2 percent in 2009 and 2010 respectively.

Central Statistical Office figures in December showed consumer price inflation slowed to 5.0 percent year-on-year in November as food and non-alcoholic beverages costs decreased and owing to a high inflation base the previous year.

Largely due to easing inflation, the central bank cut its main lending rate by 100 basis points to 10 percent in December 2009, bringing cumulative rate reductions to 500 basis points since December 2008.

The bank said in its survey on Tuesday businesses were not expecting further interest rate cuts.

"Businesses appear to regard recent domestic interest rate cuts as being only temporary. Whereas in the previous survey there was a strong sentiment that rates would continue to be cut in both 2009 and 2010, this has been replaced by some expectation of rate increases," it said.

The central bank also said companies saw economic growth of 1.7 and 2.6 percent for 2009 and 2010 respectively.

A Reuters poll in September showed the Botswana economy is expected to contract by 11 percent in 2009 and grow by 6 percent in 2010.

Prospects for employment were subdued for the first part of the year as firms were hesitant to hire but the outlook gradually improved for the latter part of 2010, the survey showed. (Reporting by Phumza Macanda; editing by Stephen Nisbet)