Sub-Saharan Africa is among regions in the world projected to record accelerated economic growth in 2019, amid a slowdown in global growth precipitated by heightened trade tensions and rising interest rates in the US.
The International Monetary Fund says that GDP growth in sub-Saharan Africa will rise from 2.9 per cent posted last year to 3.5 per cent this year, and 3.6 per cent in 2020.
The projection is however a 0.3 percentage point lower, blamed partly on the declining crude oil prices, which have plummeted from a high of $85 a barrel and are expected to average $60 this year.
These have significantly impacted growth for oil-producers Angola and Nigeria.
One-third of sub-Saharan economies are expected to post growth above five per cent, raising optimism of impressive performance in a year when external shocks, including trade tensions, rising US interest rates, dollar appreciation, capital outflows and volatile oil prices are expected to continue.
More critically, the nagging challenges of ballooning debt, expanding recurrent expenditures and slowdown in revenue mobilisation will continue to curtail growth.
“Across all economies, measures to boost potential output growth, enhance inclusiveness and strengthen fiscal and financial buffers in an environment of high debt burdens and tighter financial conditions are imperatives,” says the IMF in its World Economic Outlook 2019 report.
The Fund forecasts that 2019 will not be a good year for the global economy, whose growth is projected to decline to 3.5 per cent from 3.7 per cent last year, largely due to an escalation in trade wars between the US and China.
The US has imposed import taxes on steel, aluminium and hundreds of Chinese products, drawing retaliation from China and other US trading partners like Mexico and Canada.
Other factors include the messy Brexit process, Italy’s financial struggles, volatile commodity prices and rising interest rates in the US, which are projected to impact heavily on the global economy
Growth in advanced economies will slow from an estimated 2.3 per cent in 2018 to 2.0 per cent in 2019 and 1.7 per cent in 2020.
Growth in the Euro region is set to moderate from 1.8 per cent in 2018 to 1.6 per cent in 2019, while in the US, it is forecast to remain flat at 2.5 per cent, and decline to 1.8 per cent in 2020.
Growth in Asia is expected to dip from 6.5 per cent in 2018 to 6.3 per cent this year, and 6.4 per cent in 2020, with China’s declining from 6.6 per cent to 6.2 per cent due to the combined influence of financial regulatory tightening and trade tensions with the US.
India’s growth on the other hand, is poised to pick up to 7.5 per cent from 7.3 per cent last year, benefiting from lower oil prices and a slower pace of monetary tightening, plus easing in inflationary pressures.
In Latin America, growth is projected to recover from 1.1 per cent in 2018 to 2.0 per cent this year, and 2.5 per cent in 2020.