IMF Cuts Sub Saharan Africa Forecasts

14 May 2012 18:00 - Victoria Wedderburn

IMF Cuts Sub Saharan Africa Forecasts

The International Monetary Fund have said Sub-Saharan Africa's economies will expand at a slower rate in 2012 than earlier forecasted undermined by global financial distress and a sluggish recovery in South Africa. In its latest Regional Economic Outlook, the IMF forecast 5.4 % growth this year from 5.1 % in 2011. Its previous projections were 5.9 and 5.5 % respectively.

“The growth outlook for 2012 is somewhat less favourable than outlined in the October 2011 Regional Economic Outlook, with the growth projection for 2012 now cut by almost one-half a percentage point, driven in large part by the weaker economic outlook for South Africa,” the IMF said. Growth in Africa's economic powerhouse was likely to be a relatively modest 2.7 % this year and 3.4 % in the next, held back by its reliance on trade with Europe and close links with western financial markets, the Fund said.

In Nigeria, Africa's largest oil producer, growth is expected to remain largely static at around 7% despite fiscal consolidation. The IMF also said that growth in middle income economies is expected to remain static or lower than 2011, as these nations tend to track more closely the global economic slowdown. Eleven of the nations included in the survey are defined as middle income, including Botswana, Namibia, Ghana, Senegal, and Zambia.