The World Bank Global Economic Prospects report indicated that regional growth is expected to pick up to 2.9% in 2020, assuming an investor confidence improves in some large economies, energy bottlenecks ease, a pickup in oil production contributes to recovery in oil exporters and robust growth continues among agricultural commodity exporters.
The forecast is weaker than previously expected, reflecting softer demand from key trading partners, lower commodity prices, and adverse domestic developments in several countries. Economic growth in South Africa is expected to pick up to 0.9%, assuming the new administration’s reform agenda gathers pace, policy uncertainty wanes, and investment gradually recovers, the reports stated.
While growth in Nigeria is expected to edge up to 2.1% as the macroeconomic framework is not conducive to confidence. The report further stated that growth in Angola is anticipated to accelerate to 1.5%, assuming that ongoing reforms provide greater macroeconomic stability, improve the business environment, and bolster private investment. In the West African Economic and Monetary Union, growth is expected to hold steady at 6.4%. In Kenya, growth is seen edging up to 6%, the report noted.
Emerging Market Should Rebuild Macroeconomic Policy
The report noted that a steep productivity growth slowdown has been underway in emerging and developing economies since the global financial crisis, despite the largest, fastest, and most broad-based accumulation of debt since the 1970s. These circumstances add urgency to the need to rebuild macroeconomic policy space and undertake reforms to rekindle productivity.
Nevertheless, downside risks predominate, including the possibility of a re-escalation of global trade tensions, sharp downturns in major economies, and financial disruptions. Emerging market and developing economies need to rebuild macroeconomic policy space to enhance resilience to adverse shocks and pursue decisive reforms to bolster long-term growth, the World Bank advises.