Wednesday, February 4, 2009

How Will the Economic Downturn Affect Africa?

Maybe not as badly as you might think:
On 6 November, the International Monetary Fund (IMF) released updated forecasts showing that economic growth in all regions will slow markedly. But Africa’s performance will still be relatively strong, with 5.2 per cent average growth in gross domestic product (GDP) projected for 2008 and 4.7 per cent for 2009. That compares favourably not only to the hard-hit industrialized economies, but also to the growth rates of some other developing regions, such as Latin America and the Caribbean.
As economic growth slows worldwide and some major industrial economies have gone into recession, it has become clearer that the repercussions of the global financial crisis will be felt throughout Africa’s “real economy” — beyond the narrow realm of stock trading. Dwindling financial remittances from Africans working abroad, lower world prices for Africa’s exports, scarcer and more costly commercial credit and less generous flows of foreign aid will inevitably dampen productive activity across the continent.

h/t Africa Unchained

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