Africa to Register Mild Economic Growth in 2022 -Report
After recording the slowest growth in 2021, Africa will register mild growth in 2022, a 3.5% jump is expected as vaccination rates will remain very low, according to the Allianz Economic Outlook report.
According to the report, the vaccination rate settled at 32% in the overall continent but only 4% in Sub-Saharan Africa.
It said gross domestic product (GDP) growth expectations in countries are Senegal (6.1%), Kenya (5.6%), Ivory Coast (5.5%), Ghana (5.4%), Egypt (4.6%), Mozambique (4.6%), Namibia (3.7%), Morocco (3.3%), Tunisia (3.2%), Gabon (3.2%), Algeria (2.4%), Nigeria (2.3%), Angola (2.2%) and South Africa (2.0%).
In 2022, oil exporters such as Angola and Algeria will continue to benefit from the commodity upcycle tailwind. On the other hand, amid rapidly rising inflation to double digits in most countries, monetary policy rates are expected to increase in Kenya, Nigeria, Ghana, South Africa and Egypt.
In an environment of continued sanitary uncertainty, this monetary tightening is expected to put a brake on growth. In addition to rising energy prices, food inflation has soared to hardly bearable levels in Angola, Ethiopia, Nigeria and Ghana.
The food security situation is likely to deteriorate in 2022 in southern and eastern Ethiopia, Kenya and Somalia as a result of adverse climate events. The deteriorating security situation in Ethiopia entails a significant risk of spillovers to the region, including migration flows to the Kenyan border.
Tunisia, Ghana, Mozambique, Kenya and South Africa are hot spots regarding debt sustainability. Tunisia, Morocco, Egypt and Burkina Faso will see current account deficits only improve slightly in 2022 after deteriorating in 2021.
Global growth should remain robust but uneven, with the rising divergence between advanced and emerging market economies.
“Our 2022 GDP forecast remains broadly unchanged, with the Eurozone and the US expected to grow by +4.1% and +3.9%, respectively”. Meanwhile, growth in China slows to +5.2% due to ongoing disruptions in the real estate sector and the government’s focus on financial stability.
China’s lowest contribution to global GDP growth since 2015 is likely to have negative spillover effects on emerging markets whose recovery will be shallower compared to past crises. Global trade is expanding once again above the long-term average but will be disrupted by labour and supply chain bottlenecks, amplified by omicron.
“We expect global trade in volume to grow by +5.4% in 2022 and +4.0% in 2023”, according to Allianz. #Africa to Register Mild Economic Growth in 2022 -Report
