Graph, money, economic forecast
JOHANNESBURG - Economic growth in sub-Saharan Africa is set to accelerate to 3.4 percent next year, the International Monetary Fund (IMF) said Tuesday, citing Nigeria's recovering oil and agricultural sectors.
The IMF said in its latest World Economic Outlook report that the region would grow by 2.6 percent this year after 1.4 percent in 2016.
"Growth is expected to rise gradually," it said while noting that the rate would be uneven and "barely above population growth".
GDP in the west African powerhouse Nigeria contracted by 1.6 percent in 2016 but is predicted to grow by 0.8 percent this year and 1.9 percent next year.
The IMF said Nigeria was benefiting from "recovering oil production and ongoing strength in the agricultural sector", but the lender raised concerns about policy implementation and weakness in the banking system.
Last month Nigeria's economy emerged from recession after five consecutive quarters of contraction triggered by the fall in oil prices that slashed government revenues.
Angola, where Jose Eduardo dos Santos stepped down as president last month after 38 years, is also set for a boost from the oil recovery, rebounding to 1.5 percent growth this year from a 0.7 percent contraction last year.
The IMF predicted weak growth of 0.7 percent in South Africa in 2017, saying "heightened political uncertainty" in the ruling ANC party had hit confidence despite good agricultural production.
Among the low-income countries in the sub-Saharan region, the report forecast continued high growth in Ethiopia, at 8.5 percent in 2017 and 2018.
It also warned of food shortages and drought in The Gambia, South Sudan and Somalia.
Meanwhile, the IMF bumped up its global growth forecasts, saying an upswing in the world economy would likely gather pace into next year.
But the global crisis lender called on governments to strike while the iron was hot, saying dangers for the current recovery lurked on the horizon and ambitious reforms were necessary for continued poverty reduction.
Global economic output should increase by 3.6 percent this year and by 3.7 percent in 2018, up marginally from forecasts published three months ago but well above growth seen in 2016.
"The picture is very different from early last year when the world economy faced faltering growth and financial market turbulence," IMF Research Director Maurice Obstfeld said Tuesday in prepared remarks.
But Obstfeld said the current moment presented a fleeting opportunity to act, pointing to recent IMF warnings about sluggish growth in advanced economies, sharpening divides between rich and poor and bloated sovereign debt levels.