In its World Economic Outlook update released today, Monday, according to Bloomberg, the worst contraction of the Nigeria’s economy was caused by lower oil prices and output and shortages of foreign exchange to import raw materials.
It said that the economy of the Sub-Saharan Africa will experience growth prospects in 2019 due to the great improvement in the Nigeria’s economy.
The IMF explained that the region’s economy will probably expand 3.8 percent in 2019. That compares with a 3.7 percent prediction in April.
The upgraded forecast “reflects improved prospects for Nigeria’s economy” and an increase in commodity prices. Gross domestic product in Africa’s most-populous nation will probably rise 2.3 percent, it said, lifting its estimate from 1.9 percent in April.
On the South African economy, the IMF predicted that it will expand by 1.5 percent this year and 1.7 percent the next.
“Despite the weaker-than-expected first-quarter out-turn in South Africa, 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.”
South Africa, the continent’s most-industrialized economy, hasn’t grown at more than 2 percent a year since 2013. GDP shrank the most in almost a decade in the first quarter as former President Jacob Zuma handed the reins to Cyril Ramaphosa.
Zuma spent close to nine years in power, during which time the nation lost its investment-grade credit rating and policy uncertainty and unemployment increased.
Nigeria and South Africa’s economies account for about half of the region’s GDP.
Source: ECONOMIST.
