Africa set for stronger growth in 2025 as global prospect remains subdued- report
The percentage of experts forecasting stronger growth for Sub-Saharan Africa has increased to 78% this year, up from 65% last year, signalling a positive shift for the continent.
A January growth outlook report by the World Economic Forum (WEF) has revealed that a significant global economic recovery is unlikely this year.
The report, which surveyed chief economists from both public and private sectors worldwide, indicates that most respondents maintain a cautious outlook due to persistent challenges hampering substantial recovery.
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"The outlook remains subdued, with a majority of chief economists (56%) expecting the global economy to weaken over the next year, compared to 17% anticipating improvement," the report states.
However, the report highlights regional divergences, with a notably optimistic forecast for Sub-Saharan Africa. A growing number of economists are predicting moderate to strong economic growth in the region, reflecting an improved economic outlook.
The percentage of experts forecasting stronger growth for Sub-Saharan Africa has increased to 78% this year, up from 65% last year, signalling a positive shift for the continent. This optimism is largely attributed to easing inflation and more accommodative monetary policies, both of which are expected to support economic stability throughout the year.
The report notes that 64% of respondents expect average inflation in Sub-Saharan Africa to remain moderate, compared to 56% last year. Additionally, the proportion of experts predicting a lower cost of living has risen from 8% to 20%, further reinforcing improved inflation prospects for 2024.
Monetary policy in the region, which began easing in many countries towards the end of last year, is expected to remain unchanged by 67% of the economists surveyed, while 33% anticipate a further relaxation of monetary policy this year.
The positive growth outlook for Sub-Saharan Africa aligns with the International Monetary Fund’s (IMF) latest projections. In its October 2023 regional economic outlook, the IMF stated that countries in the region are implementing difficult but necessary reforms to restore macroeconomic stability.
The IMF projects regional growth at 3.6% for 2024, with a modest recovery expected in 2025 at 4.2%. However, it warns that the recovery remains uneven, with tight financing conditions and social frustrations stemming from a higher cost of living, limited opportunities, and weak governance.
"While overall imbalances have started to narrow, the picture remains varied. The interplay of poverty, scarce opportunities, and short-term hardships linked to macroeconomic adjustments continues to fuel social frustration," the IMF noted.
Despite global economic headwinds, Sub-Saharan Africa’s prospects appear brighter, offering a glimmer of hope for sustained recovery and economic stability in the region.
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