Sub-Saharan Africa poised for healthy economic growth

Washington: Sub-Saharan Africa, home to some of the world's poorest of the poor, is poised for healthy economic growth in the next year, while Latin America could face a slow-down, the International Monetary Fund (IMF) said yesterday.

Unveiling the economic outlook for sub-Saharan Africa, IMF economists said the African nations are growing more slowly than emerging East Asia, but they expect six per cent growth in total output forecast this year and nearly seven per cent growth in 2008.

Inflation has been contained in most of Africa, excluding Zimbabwe, which is dealing with hyperinflation, according to the fund's annual regional economic outlook, released yesterday.

"African economic policies are far better than in the past. Deficits are going down, inflation is going down, and the growth rate is picking up based on those strong policies," said Abdoulaye Bio-Tchan, the IMF's African development director.

Latin America

The IMF is projecting growth in Latin America at five per cent this year and 4.25 per cent in 2008. According to economists, inflation remains a major challenge. While low by historic standards, it has been edging up in some countries.

Latin American countries have been sustained by high commodity prices, and the full effects of the US housing market decline are still unknown, the IMF said.

Future challenges include containing real growth in primary spending, ensuring strong financial supervision, and improving medium term investment and productivity, IMF officials said.

"The region has weathered the financial market turbulence rather well so far. Stock prices, having taken an initial hit, recovered to exceed pre-turbulence levels in some countries, and currencies have also generally readjusted to pre-turmoil levels," said Anoop Singh, department director for the Western Hemisphere.

The IMF's full regional outlook for Latin America is due to be presented in Sao Paulo, Brazil, on November 9. The main challenge for Latin America is to increase its resilience to external shocks.