Sub-Saharan Africa maintains growth in an uncertain world

Sub-Saharan Africa remains relatively insulated from the negative factors pulling down growth in advanced countries, but countries with closer trade links to Europe are experiencing some softening in exports.The IMF’s latest Regional Economic Outlook for Sub-Saharan Africa finds that economic activity in the region has continued generally robust amid the hesitant global recovery. Regional output is projected to expand by about 5 per cent in 2012 and 2013, a similar pace to that observed in 2010/11.“We expect growth in sub-Saharan Africa to remain quite robust,” IMF African Department Director Antoinette Sayeh told reporters at a news conference in Tokyo during the 2012 IMF–World Bank Annual Meetings. But she added that the regional outlook was subject to serious risk from adverse developments in the global economy. “Downside risks are greater than they were before, and policymakers need to be even more alert,” Sayeh stated.A new global slowdown would impair expansion in the region but, absent a wider financial crash of the type triggered by the collapse of the U.S. investment bank Lehman Brothers in 2008, a downturn would not derail growth. Depending on the characteristics of the slowdown, some individual countries might experience more severe disruptions because of specific exposures to certain export markets, commodity prices, or sources of remittances and foreign investment.Favorable growth performanceEconomic activity has held up well in sub-Saharan Africa, supported by generally prudent policies and improved fundamentals in most countries. Domestic demand has provided impetus, helped by public and private investment.Improved inflation outlookInflation in sub-Saharan Africa has been slowing in 2012. This partly reflects the reversal of the 2010/11 spike in global food and fuel prices. But it also reflects monetary tightening, especially in East Africa, where the rise in inflation had been the most marked in the region. Against this backdrop, inflation in sub-Saharan Africa is anticipated to maintain its downward trend, and reach some 8 per cent by end-2012 and about 7 per cent in 2013.The recent surge in world prices of cereals is taken into account in these inflation forecasts, but further increases in world prices would present new risks. The surge in cereal prices so far has also exacerbated food security concerns in countries and subregions in sub-Saharan Africa experiencing poor rainfall

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Sub-Saharan Africa maintains growth in an uncertain world