2024-06-15 18:09:00
This slowdown, which displays a troublesome yr 2023 for financial exercise in sub-Saharan African international locations, is because of the inflationary shock following the struggle in Ukraine which led to the rise in rates of interest all through the world, inflicting a slowdown in worldwide demand, excessive spreads and chronic stress on change charges, explains the IMF.
Trying to 2024, the area is anticipated to rebound, with progress reaching 4.0%, pushed by a restoration in 4/5 of sub-Saharan African international locations, and with sturdy efficiency in international locations resource-intensive, the report stated, including that macroeconomic imbalances have been additionally anticipated to enhance, as inflation would fall in many of the area and public funds would steadily be placed on a extra sustainable footing.
Nevertheless, the rebound is just not assured, notes the IMF, noting {that a} slowdown in reform efforts, a rise in political instability within the area or downward exterior dangers (specifically linked to the slowdown in China) may undermine the expansion.
Moreover, 4 clouds loom on the horizon that require decided coverage motion within the face of adverse trade-offs: First, inflation continues to be too excessive. It’s in double digits in 14 international locations and stays above the goal in most international locations with specific targets. Second, the area continues to face vital change price pressures.
Third, debt-related vulnerabilities are excessive. The financing disaster is just not over, as borrowing charges stay excessive and debt rollover is a problem and half of the area’s low-income international locations are at excessive danger or in debt misery.
Lastly, whereas the restoration is underway, financial divergences inside the area are widening – specifically: per capita incomes in resource-intensive economies stay low, the report provides.
2024-06-15 18:09:00