The International Monetary Fund (IMF) has revised economic growth forecast for Sub Saharan Africa from 5 percent to 3.8 percent.
According to IMF new world economic outlook report released yesterday, growth in low income countries is expected to slow down to 4.8 percent in 2015, from 6 percent in 2014.
The slowdown is largely attributed to weak commodity prices and the prospect of tighter global financial conditions.
Globally, economic growth has been revised to 3.1 per cent, down from the July forecast of 3.3 per cent. The decline reflects a further slowdown in emerging markets and a weaker recovery in advanced economies.
The impact of decline in global economic growth is being felt in all the IMF 188 member countries including Rwanda and other East African countries.
The fund explains that the impact of global economic slowdown is affecting countries in form of slower economic growth, low commodity prices in the international market, low capital inflows and out flow of capital especially in low income developing countries.
“Prospects across the main countries and regions remain uneven. Relative to last year, growth in advanced economies is expected to pick up slightly, while it is projected to decline in emerging market and developing economies,” the report said.
“With declining commodity prices, depreciating emerging market currencies, and increasing financial market volatility, downside risks to the outlook have risen, particularly for emerging market and developing economies,” the report indicated.
Growth is projected to increase modestly to 2 percent this year and 2.2 percent next year in advanced countries.
This is supported by declining oil prices, accommodative monetary policy, and improved financial conditions, and in some cases, currency depreciation.
Meanwhile, the outlook for emerging economies is projected to improve especially in Brazil, Russia, and some countries in Latin America and in the Middle East.