You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App
Join our mailing list to receive top business news every weekday morning.

IMF forecasts deeper recession for sub-Saharan Africa

Due to Covid-19 pandemic.
Image: Andrew Harrer, Bloomberg

Sub-Saharan Africa’s gross domestic product is expected to shrink by 3.2% this year due to the impact of the COVID-19 pandemic, the International Monetary Fund said on Wednesday, more than a previous estimated contraction of 1.6%.

In its World Economic Outlook update, the IMF projected that GDP in South Africa, the continent’s most advanced economy, would shrink by 8% in 2020, a bigger contraction than the 5.8% forecast in April.

South Africa’s strict nationwide lockdown, imposed in late March to curb the spread of the novel coronavirus, sharply curtailed production across key sectors such as mining and retail, further hobbling an economy already in recession.

The lockdown remains in place, but some restrictions have been eased to allow key sectors to resume operations.

For Africa’s top oil exporter Nigeria, the IMF also projected a significant economic contraction, with GDP seen falling 5.4% this year after an earlier forecast for a 3.4% contraction.

Nigeria faces economic distress not only from the coronavirus outbreak but also from a sharp fall in crude prices.

Nigeria’s government has said it expects its economy to contract by 3.4% this year. However, last month Nigeria’s finance minister said the economy could shrink by as much as 8.9% in 2020 in a worst-case scenario.

Meanwhile, the cost of living in Nigeria has risen steadily. Annual inflation rose for the ninth straight month in May, to a two-year high of 12.4%.

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.

COMMENTS   0

You must be signed in to comment.

SIGN IN SIGN UP

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

Podcasts

NEWSLETTERS WEB APP SHOP PORTFOLIO TOOL TRENDING CPD HUB

Follow us:

Search Articles:Advanced Search
Click a Company: