IMF Tweaks Sub-Saharan Growth Rate Down to 3.3%

The International Monetary Fund released its publication “Light in the Horizon” during the Annual Meeting of the Word Bank (WB) – International Monetary Fund (IMF) in Marrakech. According to its Regional Economic Outlook for Sub-Saharan Africa, the growth rate for the region is expected to be slightly lower at 3.3%, down from the 4% estimated in 2022.

The IMF cited several reasons for this downward revision. First, the high cost of capital and unfavorable exchange rates are still lingering despite the end of the COVID pandemic. Secondly, the Russia-Ukraine conflict has added inflationary pressure and created high risks for #FoodSecurity. The Region has also experienced a number of regime changes and the political instability is certainly not conducive for business.

However, the IMF notes that the general trend towards recovery around the world. Unfortunately, the outbreak of armed conflict in Gaza, coupled with the continuing Ukraine-Russia war, is adding to the geopolitical turmoil.

In particular, if the conflict blows over in the Middle East, it could potentially disrupt oil supplies and impact maritime trade route due to the proximity of the Suez Canal. Therefore, it is important to monitor the situation and hopefully, there will be no escalation or expansion.