Wednesday, 24 June 2009

World Bank report highlights downturn in growth and capital flows to SSA

On 22 June, the World Bank released its 2009 edition of Global Development Finance, in which the institution indicated that the world economy would shrink by 2.9% this year vs a 1.2% growth in developing countries. In this latter group, investment flows ebbed to $707bn in 2008, significantly down from the $1.2trn recorded in 2007.

In the case of Sub-Sahara Africa (SSA), the World Bank highlighted that the region had been hit hard by negative dynamics in external demand, plunging export prices, weaker remittances and tourism revenues, and sharply lower capital inflows. Growth in SSA is now seen at 1% in 2009, from 5.7% in 2006-08, although it should strengthen in 2H09 and may rebound to 3.7% in 2010 and 5.2% in 2011, respectively.

On World Bank data, the fastest growing economies in the region in 2009 include the Republic of Congo (7.4%), Malawi (6.6%), Ethiopia (6.0%), Rwanda (5.1%) and Uganda (5.0%), while six nations could experience a contraction in GDP growth (of which Seychelles' is estimated at -10.5%, Botswana -8.0%, and Angola -1.9%). Nigeria is forecast to expand 2.9%, in line with the IMF projection.

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