Key findings and outlook
Sub-Saharan Africa, October 26, 2011
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Bibliographic details
- Published: October 26, 2011
- Series: Sub-Saharan Africa
- DOI: https://doi.org/10.5089/9781616351250.086
Regional Economic Outlook, October 2011, Sub-Saharan Africa: Sustaining the Expansion
Key findings and outlook
- The region's economy is set to expand by more than 5¼ percent in 2011.
- IMF staff baseline projection for 2012 is growth of 5¾ percent, owing to one-off boosts to production in a number of countries.
- The 2012 projection is highly contingent on global economic growth being sustained at about 4 percent.
- A further slowing of growth in advanced economies would generate significant headwinds, with more globally integrated countries likely to be most affected.
Major risks and transmission channels
- Increase in global food and fuel prices, amplified by drought affecting parts of the region, has hit the budgets of the poor and sparked rising inflation.
- Hesitations in the global recovery threaten to weaken export and growth prospects through reduced external demand.
- Countries more integrated into global markets face greater vulnerability to an external downturn.
Policy guidance and scenarios
- Under continued global slow and steady growth (about 4 percent):
- Most low-income countries should focus on medium-term considerations in setting fiscal policy.
- Tighten monetary policy wherever nonfood inflation has climbed above single digits.
- In the event of a global downturn (subject to financing constraints):
- Policies in low-income countries should focus on maintaining planned spending initiatives.
- Allow automatic stabilizers to operate on the revenue side.
- In slower-growing, mostly middle-income countries without binding financial constraints:
- Policies should remain supportive of output growth, especially if global growth sputters.
- For the region's oil exporters:
- Better terms of trade provide an opportunity to build up policy buffers against further price volatility.
Policy trade-offs highlighted
- Policymakers need to tread a fine line between:
- Addressing challenges from strong growth and recent exogenous shocks (food/fuel price increases, drought-driven inflation), and
- Warding off adverse effects of another global downturn (weaker export demand and growth).
International Monetary Fund. Regional Economic Outlook, October 2011, Sub-Saharan Africa: Sustaining the Expansion. October 26, 2011.
Content in this bundle
- Regional Economic Outlook: Sub-Saharan Africa - Sustaining the Expansion, October 2011
- Sreo1011f