GABORONE - The world's largest diamond producer Botswana should cut its public sector by at least 25 percent to make up for potentially diminishing funds it will receive from the gems, the World Bank has said.

According to a report on the country's public expenditure prepared by the World Bank and presented to stakeholders on Tuesday, the economy is reaching a turning point.

The future will bring reduced mineral revenues and increase the need for a smaller public sector to ensure fiscal sustainability, it said.

Diamond production in Botswana accounts for about 33 percent of GDP.

Botswana has typically run budget surpluses but the situation reversed in the past two years as the global economic crisis weakened diamond revenue by as much as 50 percent.