Ethiopia- Africa- Economy

Sub-Saharan Africa projected economic growth to weaken to 3.8 percent in 2022- IMF

APA-Addis Ababa (Ethiopia)

The International Monetary Fund (IMF) Thursday said that Sub-Saharan Africa's projected economic growth for 2022 will weaken to 3.8 percent due to a range of factors.

 Among them are the effects of Russia-Ukraine crisis, the COVID-19 pandemic, climate change and heightened security risks in the Sahel region.

The report further said the recovery in sub-Saharan Africa picked up in the third quarter of 2021 and held up despite the onset of a fourth COVID-19 wave at the end of the year.

Estimated growth in 2021 has been revised upward from 3.7 to 4.5 percent

“This year, however, the progress has been jeopardized by the Russian invasion of Ukraine which has triggered a global economic shock that is hitting the region at a time when countries’ policy space to respond to it is minimal to nonexistent,” IMF said.

Surging oil and food prices in particular are straining the external and fiscal balances of commodity-importing countries and have increased food security concerns in the region.

Moreover, the shock compounds some of the region’s most pressing policy challenges, including the COVID-19 pandemic’s social and economic legacy, climate change, heightened security risks in the Sahel, and the ongoing tightening of monetary policy in the United States.

Accordingly, the IMF says the growth momentum for the region has weakened this year with economic activity expected to expand by 3.8 percent.

The economic recovery is projected to accelerate in 2023 to about 4 percent over the medium term.

This pace, however, is not enough to make up for lost ground from the pandemic, the report noted.

Besides accelerating the COVID-19 vaccination campaign, the Fund calls for immediate policy priorities including helping the most vulnerable households cope with high food and energy costs without adding to existing debt vulnerabilities, containing inflation pressures, and managing exchange rate adjustments.


MG/abj/APA

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