AFRICA’S ECONOMIC OUTLOOK
MEDIUM-TERM FORECAST: STORMY WEATHER
Pan-African challenges amid a turbulent global environment underline the need to improve coordination and resilience By Angus Downie, OPEC Fund, Senior Economist
O ver the course of 2023, the impact of the COVID-19 pandemic has faded, the world has largely adjusted to the energy price shock caused by the war in Ukraine, while the rise in inflation caused by supply-chain disruptions has been slowed by tightening monetary policy. However, while the global economy has shown tremendous resilience, the recovery from the shocks of the past few years remains slow and uneven. Energy and food security remain elusive for many households, prices are still high, and financial stability cannot be taken for granted – particularly given persistent high interest rates and shadow bank concerns. More recently, a new war in the Middle East has further complicated an already uncertain outlook. In a special report on Africa, the International Monetary Fund (IMF) said in October 2023: “The crises have underscored the continent’s ongoing vulnerability and the need to build resilience.” The report was published
on the occasion of the IMF/World Bank Group annual meetings in Morocco – the first time in 50 years the institutions held their conference in Africa. An uncertain economic outlook Given this backdrop, the global economy will be shaped over the next few years by the interplay of several key factors including economic policies, elevated
advancements – possibly rounded off by other “black swan” events such as new global health scares. In line with the IMF’s World Economic Outlook of mid-October 2023, the near term global recovery remains slow, with increasing regional gaps and little room for policy error. The IMF expects global growth to slow to 3.0 percent in 2023 (from 3.5 percent in 2022) and 2.9 percent in 2024, below the historical (2000–19) average of 3.8 percent (see Chart 1). “The global economy is limping along, not sprinting,” said IMF Chief Economist Pierre-Olivier Gourinchas. Meanwhile, advanced economies are expected to slow to 1.5 percent in 2023 (from 2.6 percent in 2022) and 1.4 percent in 2024 as policy tightening
debt stocks, geopolitical tensions, climate change and technological
Crises have underscored the continent’s ongoing vulnerability and the need to build resilience.
starts to bite. Emerging market and developing economies are forecast to see a modest decline in growth to 4.0 percent in both 2023 and 2024 (from 4.1 percent in 2022).
International Monetary Fund, Special Report on Africa, October 2023
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