The International Monetary Fund (IMF) has forecasted that Sub-Saharan Africa will experience better economic growth than advanced countries by the end of 2023, despite a global economic slowdown. The announcement was made during the release of the World Economic Outlook on October 10, 2023.
According to the IMF report, Sub-Saharan Africa is expected to achieve a Gross Domestic Product (GDP) growth rate of 3.3 percent by the end of the year.
This projection surpasses the anticipated 1.5 percent growth for advanced economies, which include the United States, United Kingdom, and the Euro Area. Sub-Saharan Africa's revised growth projection for 2023 also outpaces the world's projected output growth of 3.0 percent.
Mr. Pierre-Olivier Gourinchas, Economic Counselor at the IMF Research Department, noted that the slowdown in economic growth was more prominent in advanced economies compared to emerging markets and developing nations.
The IMF's projections indicate a global growth deceleration from 3.5 percent in 2022 to 3 percent in 2023, followed by a further decrease to 2.9 percent in 2024. This trend remains below historical averages.
In terms of inflation, the IMF reported a decline from 9.2 percent in 2022 to 5.9 percent in 2023, with an expected drop to 4.8 percent in 2024. Core inflation, which excludes food and energy prices, is projected to decrease gradually to 4.5 percent in 2024.
The IMF attributes this global economic slowdown to three main factors: a near-complete recovery in services, the necessity of tighter monetary policies to combat inflation, and the impact of last year's commodity price shock on inflation.
In addressing these economic challenges, the IMF emphasized the need for fiscal policies to support monetary strategies and the disinflation process. Structural reforms and a focus on returning to medium-term growth projections were also recommended.
Mr. Gourinchas called for multilateral cooperation to ensure better growth outcomes for all countries. He encouraged nations to refrain from implementing policies that violated World Trade Organization rules and disrupted international trade.
Safeguarding the flow of critical minerals for climate transition and agricultural commodities was also advised.
The IMF's World Economic Outlook highlighted the global economy's significant shock caused by the COVID-19 pandemic in 2020.
Despite a strong initial recovery, subsequent forces have moderated the pace of economic rebound, including the long-term consequences of the pandemic, geopolitical tensions like the Russia-Ukraine conflict, and cyclical factors such as monetary policy tightening and extreme weather events.
- Reporting by Francis Ntow: Editing by Adewale Adejoke