The International Monetary Fund (IMF) has revised the growth rate of sub-Saharan Africa’s economy to 3.8% for 2019, up from April’s growth projection of 3.7%.
In its latest World Economic Outlook Update released on Monday, the IMF said the upwardly revised growth is supported by the rise in commodity prices.
The IMF expects the South African economy to recover over the remainder of 2018 and into 2019.
Weaker-than-anticipated macroeconomic data for South Africa contributed to the 7% depreciation of the rand, unwinding part of the sharp appreciation that had occurred in late 2017 and early 2018.
“Despite the weaker-than-expected first quarter outturn in South Africa (in part due to temporary factors), the economy is expected to recover somewhat over the remainder of 2018 and into 2019 as confidence improvements associated with the new leadership are gradually reflected in strengthening private investment,” the IMF said.
Nigeria is expected to be the standout performer amid recovery in oil prices. Nigeria’s growth is set to increase from 0.8% in 2017 to 2.1% in 2018 and 2.3% in 2019 on the back of an improved outlook for oil prices.
Nigeria and South Africa are the continent’s two biggest economies and positive economic growth in the two will see recovery in sub-Saharan Africa continue, according to the report.
“The recovery in sub-Saharan Africa is set to continue, supported by the rise in commodity prices. For the region, growth is expected to increase from 2.8% in 2017 to 3.4% this year, rising further to 3.8% in 2019.”
“The upgraded forecast reflects improved prospects for Nigeria’s economy. Its growth is set to increase from 0.8% in 2017 to 2.1% in 2018,” the IMF said.
Meanwhile global growth is projected to reach 3.9% in 2018 and 2019, in line with the forecast of the April 2018 outlook. Expansion is becoming less even, and risks to the outlook are mounting, according to the report.