IMF Revises Sub-Saharan Growth Forecast

The International Monetary Fund has raised its forecast for the economic growth of Sub-Saharan Africa to 4.5% in 2026, compared to its previous estimate of 4.3% in April. This comes despite increasing inflationary pressures, rising borrowing costs, and a decline in foreign aid, with reports confirming that the region has managed to adapt to supply chain disruptions and economic reforms. The inflation rate is expected to rise from 3.4% in 2025 to 4.3% this year, then to 5% in 2027, emphasizing the need for tighter monetary policy to combat rising prices. The report also indicated that debt service costs account for about 12% of government revenues, with external borrowing costs increasing due to yields on U.S. Treasury bonds, warning that delays in debt restructuring could hinder financing and reforms. However, some countries like Ethiopia, Ghana, and Zambia have made progress in this regard. Additionally, the report predicts that the current account surplus for oil-exporting countries will rise to 4.4% of GDP, while the deficits in resource-dependent economies are expected to expand to as much as 5.8%.

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