Botswana's economy is projected to grow by 3.7 percent this year after an estimated contraction of 0.3 percent in 2015, the International Monetary Fund (IMF) said.

"GDP growth is estimated to have turned slightly negative in 2015 owing to a decline in the global demand for diamonds and copper," the IMF said in a statement late on Thursday.

"A gradual economic recovery is projected in the next three years, based on an expected gradual increase in diamond prices and fiscal stimulus."