São Paulo – The Gross Domestic Product (GDP) of the Sub-Saharan Africa countries should grow above the world average this year and in 2012, according to a survey conducted by the International Monetary Fund (IMF). According to the survey, the region’s GDP should grow by 5.25% this year and 5.75% in 2012. Worldwide, the average increase in GDP is expected to be 4% this year, according to the IMF. Sub-Saharan Africa comprises Sudan.
The region’s low-income countries, such as Niger and Sierra Leone, are expected to grow by 6% this year and 7% in the next one. Developing countries are expected to grow by 4% to 4.5% in 2011 and 2012. South Africa, where the unemployment rate is high, should grow by roughly 3.5% in the two years. Swaziland should also grow less than the region’s average due to an ongoing fiscal crisis.
The IMF claims that strong domestic demand and high commodities’ prices are the reasons that cause these countries’ GDPs to be higher than the world average. However, the Fund warns that the same reason, as well as rising oil prices, may also harm those countries.
According to the IMF, for instance, consumer price inflation reached 10% in June this year. In the same month of 2010, it stood at 7.5%. According to the Fund, one quarter of countries Sub-Saharan Africa boast double-digit inflation rates.
However, not all of the region’s countries will attain the forecasted growth rates. The Ivory Coast is experiencing conflicts that affect its economic policy, and the Horn of Africa nations are being plagued by drought this year. The study estimates that the GDPs of Kenya and Ethiopia should grow by less than 0.5% in 2011. “The final impact of the drought, and its ramifications throughout the region, could ultimately be much larger. For example, in Tanzania, the drought has reduced hydroelectric power generation, with attendant implications for not only output but also fiscal accounts.”
Aside from the threat of drought for Horn of Africa countries and of inflation for nations benefiting from increased consumption, the study forecasts that excess debt on the part of developed countries should cause worldwide economic activity to slowdown. In Africa, the Fund expects lower foreign investment made by developed countries. Still, the outlook for the region is one of growth.
*Translated by Gabriel Pomerancblum
