Nigeria growth remained strong owing to relatively high oil prices, despite security problems in the north and larges –scale oil theft in the first half of 2013. In contrast, growth in south Africa continued to decelerate, constrained by tense industrial relations in the mining sector, tight electricity supply, anaemic private investment and weak consumer and investor confidence.

Global activity has broadly strengthened and is expected to improve further in 2014-2015, with much of the impetus coming from advances economies. Inflation in these economies however, has undershot projections, reflecting still-large output gaps and recent commodity price declines. Activity in many emerging market economies has disappointed in a less favorable external financial environment, although they continue to contribute more than two-third of global growth. Their output growth is expected to ne lifted by stronger exports to advanced economies. In this setting, downside risks identified in previous World Economic outlook reports have diminished somewhat. There are three caveats: emerging market risks have increased; there are risks to activity from lover- than-expected inflation in advanced economies aid geopolitical risks have resurfaced. Overall, the balance of risk, while improves remains on the downside

Growth in Sub-Sahara Africa remains robust and is expected to accelerate IN 2014. Tight global financing conditions or a slowdown is emerging market economies could generate some external headwinds, especially foe middle-income countries with large external linkages, producers of natural resources and frontier economies.

However some of the most salient risks are domestic, stemming from policy missteps in various countries, security threats, and domestic political uncertainties ahead of elections. Policymakers should avoid a pro-cyclical fiscal stance in fast-growing countries, tackle emerging risks in countries facing major fiscal imbalances, address vulnerabilities in those countries more exposed to external shocks and foster sustainable and inclusive growth.

Growth in sub-Sahara Africa remained strong in 2013 at 4.8 percent, virtually unchanged from 2012, underpinned by improved agricultural productions and investment in natural resources and infrastructure.

Growth was robust through out the region, especially in low-income and fragile states. Outside these groups, in Nigeria growth remained strong owing to relatively high oil prices, despite security problems in the north and larges –scale oil theft in the first half of 2013. In contrast, growth in south Africa continued to decelerate, constrained by tense industrial relations in the mining sector, tight electricity supply, anemic private investment and weak consumer and investor confidence.

Inflation continued to abate, with a few exceptions. The currencies of South Africa and some frontier market economies weakened, reflecting tightening global monetary conditions and in some instances, weak external or fiscal balances (Ghana, Nigeria , South Africa , Zambia).

Growth is projected to accelerate to about 51/2 percent in 2014, reflecting positive domestic supply-side development and the strengthening global recovery.

•  In South Africa, growth is forecast to rise moderately, driven by improvement in external demand, but risks are to the downside.
•  Nigerian Growth is projected to rebound by 0.8 percentage point, as major oil pipelines are repaired and productions in the non-oil sector continues to expand.

 View report HERE

 

International Monetary Fund

2014-04-08