The International Monetary Fund (IMF) has slashed Botswana’s 2024 growth forecast to 1% from an earlier April estimate of 3.6% due mainly to lower diamond production, it said in a statement.

The budget deficit is also expected to widen to 6% from 3.45% due to a fall in mineral revenues, the IMF said, urging the diamond-rich southern African country to consider slowing down new infrastructure projects to help the economy.

"The continued (economic) slowdown is mainly due to a fall in diamond production," said IMF said in a statement released late on Friday.

"Some fiscal relaxation is warranted this year given the fall in mineral revenues, but the execution of the ambitious capital budget should be slowed down to contain the deterioration of the deficit and prioritize projects with the highest returns," the IMF said.

Lower consumer demand and global economic weakness has lowered the demand outlook for diamonds, traditionally seen as luxury items.

In February, Finance Minister Peggy Serame projected the economy would grow by 4.2%, but a few months later the central bank warned that this target was unlikely to be attained due to continued headwinds in the global diamond market.

Botswana gets between 30-40% of revenue and 75% of its foreign exchange earnings from diamond sales.