IMF downgrades sub-Saharan Africa growth to 3.4 per cent

The International Fund (IMF) has downgraded sub-Saharan Africa growth to 3.4 per cent from previous projections of 3.5 per cent.
In the new World Economic Outlook released early this week, the IMF said Africa sub-Saharan, growth is expected at 3.4 per cent in 2019 and 3.6 per cent in 2020, 0.1 percentage point lower for both years than in April.
Uganda is among the Sub-Saharan Africa countries, and will have spillover effects.
In April the Bank of Uganda expressed concern that a slowdown in global economic growth poses risks to Uganda, especially in the area of foreign direct investment, lower prices for commodity exports and foreign exchange volatility.
In the World Economic Outlook, the IMF said that higher, albeit volatile, oil prices have supported oil-exporting countries but growth elsewhere such as in southern Africa was expected to be more subdued, following a weak first quarter.
Global growth, the IMF noted, will be forecast to expand by 3.2 per cent in 2019, picking up to 3.5 per cent in 2020 due to softening inflation.
“The projected growth pickup in 2020 is precarious, presuming stabilisation in currently stressed emerging market and developing economies and progress toward resolving trade policy differences,” the IMF said in its report.
However, it cautioned that risks to the forecast will be in the form of trade and technology tensions, a protracted increase in risk aversion and mounting disinflationary pressures that increase debt service difficulties, constrain monetary policy space to counter downturns and make adverse shocks more persistent than normal.
Prof Gita Gopinath, the IMF economic counsellor and director of research, said global financial markets have been wrestling with the intensification of trade tensions and the weakening economic outlook, noting that escalation of trade tensions in early May had brought to a halt the rally seen in financial markets since the beginning of the year.