S&P Global Ratings lowered the long-term foreign and local currency sovereign credit ratings on Botswana and the Bank of Botswana to BBB+ from A- and affirmed their short-term ratings at A-2.

The outlook is stable.

The rating agency said a prolonged depressed diamond market could negatively affect the already weakening fiscal and external balance sheets of the country, which S&P Global Ratings expects will have closed 2019 with a current account deficit of more than 8% of GDP.

The African nation will likely record twin deficits in the next few years, which could gradually cut into its "traditionally strong" fiscal and external buffers over the medium term. The rating agency expects the country's liquid external assets to continue to exceed its external debt.

S&P Global Ratings projects that Botswana's economy will grow a "modest" 2.6% in 2020 if the coronavirus pandemic somewhat stabilizes by mid-2020, down from 3.6% in 2019.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.