Global Economy: IMF Predicts 5% Growth in Africa



Growth predicted for this year and next.

Growth predicted for this year and next.

According to the latest International Monetary Fund report, Sub-Saharan Africa is expected to come in at 5% growth during 2011.

The IMF predicts that next year will be even more prosperous, with an economic growth of 6%.

Problems

However, the director of IMF Africa, Antoinette Sayeh, warned that the global market volatility of late is having a devastating affect on the region.

Sayeh said that it could mean lower exports, “inward investment flows,” and decreasing levels in much-needed aid.

She also said that inflation, which is most noticeable in high food and fuel prices, has become a distinct problem in the region.

Sayeh also warned the governments of the Africa to “tread a fine line” between the keeping ahead of challenges that occur during strong growth, and being defensive against a global downturn.

South Africa

Despite Sub-Saharan Africa’s large success this year, middle-income countries such as South Africa did not fare as well. The country is predicted to show only 3.5% growth this year.

This is because of high unemployment, mounting household debt, and weak demand for exports to Europe.

South Africa is Africa’s superpower, with the largest economy in the region, so this slowdown in growth could spell trouble despite the IMF’s bright outlooks.

The South African economy went into recession in May 2009 as a result of decreased productivity in the mining and manufacturing sectors.

The construction industry, however, has benefitted from a huge programme of government building incentives in the run-up to the 2010 World Cup.

It is also plagued by HIV, with a second-highest number of HIV/AIDS patients in the world. Around one in seven people in South Africa have HIV, and anti-retroviral drugs are available under a government scheme.

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