Sub-Saharan Africa growth cut to 3.75pc

AFRICA – The International Monetary Fund has scaled down growth predictions for the Sub-Saharan Africa region.

AFRICA – The International Monetary Fund has scaled down growth predictions for the Sub-Saharan Africa region.

The latest regional economic outlook report from the Bretton Woods institution launched on Tuesday indicates that the area’s economy is expected to expand by 3.75 per cent this year and pick up to 4.25 per cent next year.

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Sub-Saharan Africa grew by an average 5 per cent last year, according to the IMF report.

Economic expansion in the region’s middle-income countries and frontier markets such as Kenya is predicted to be 4 per cent this year and 4.3 per cent in 2016, down from an average of 5 per cent last year.

According to both studies, the current fluctuations in international oil prices and weak commodity prices will slow down growth in dominant exporters globally, with some countries expected to shed up to two per cent of their gross domestic product in the period up to 2017.

The International Monetary Fund has scaled down growth predictions for the Sub-Saharan Africa region.

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The latest regional economic outlook report from the Bretton Woods institution launched on Tuesday indicates that the area’s economy is expected to expand by 3.75 per cent this year and pick up to 4.25 per cent next year.

Sub-Saharan Africa grew by an average 5 per cent last year, according to the IMF report.

“Of the three factors that have underpinned the region’s solid performance of the last decade or so — a much improved business and macro-economic environment, high commodity prices and highly accommodative global financial conditions — the latter two have become far less supportive,” reads the report.

MIDDLE-INCOME COUNTRIES

Economic expansion in the region’s middle-income countries and frontier markets such as Kenya is predicted to be 4 per cent this year and 4.3 per cent in 2016, down from an average of 5 per cent last year.

Even with the depressed growth prospects, Kenya is among countries that the IMF expects to experience accelerated growth due to investments in key infrastructure.

“Conversely, growth is forecast to accelerate in Kenya, supported by investment in transport and power generation and in Senegal, supported by dynamic private sector activities,” said the IMF.

The economic outlook report comes under a month after the IMF released the world economic survey that dampened growth predictions for commodity exporting countries.

According to both studies, the current fluctuations in international oil prices and weak commodity prices will slow down growth in dominant exporters globally, with some countries expected to shed up to two per cent of their gross domestic product in the period up to 2017.

This will mainly result from declining investments in the oil and commodity exporters and developing nations that are dependent on foreign direct investments.

Crude prices have fallen by more than 60 per cent since mid-last year, resulting into a reduction in exploration in markets such as Kenya as oil and gas companies redirect their funds to fields where they have already started production.

November 6, 2015; http://www.nation.co.ke/business/IMF-cuts-Sub-Saharan-Africa-growth/-/996/2933818/-/7g2y7vz/-/index.html

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