Economic damage report from latest virus waves

The evidence from the latest COVID-19 waves sweeping through Sub-Saharan Africa point to a smaller economic blow compared to previous waves. Of course, there is a considerable degree of divergence, especially between countries imposing harsh restrictions – such as Uganda and Kenya – and those with more light-touch measures, like Nigeria or Ghana. Outside of South Africa, there is little sign that daily new cases are about to peak, suggesting that curbs to tame outbreaks will remain in place and continue to dampen activity. Worryingly, low vaccination rates across the region mean that economies will suffer under on-and-off restrictions with the emergence of any new virus waves.
William Jackson Chief Emerging Markets Economist
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Africa Economics Update

Oil woes to hold back recoveries in Angola & Nigeria

Falling oil production has weighed on the Nigerian and Angolan economies, with the latter likely to suffer its sixth consecutive annual decline in GDP this year. While output should rise next year, we doubt that either will be able to meet its OPEC+ quota, preventing faster recoveries from taking hold in 2022.

21 October 2021

Africa Data Response

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Comments by Nigeria’s vice president endorsing a more market-based exchange rate regime reflect growing concern about the distortionary effects of the current FX system, but there is no evidence that key officials backing the existing currency arrangements are also shifting tack. In South Africa, ongoing industrial action in the steel industry will probably dampen manufacturing output in Q4, in another hit to the recovery in the sector and the wider economy. Finally, escalating tensions in Ethiopia raise the spectre of more severe strains in the balance of payments.

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More from William Jackson

Middle East Chart Book

Gulf countries move to lift containment measures

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26 August 2021

Emerging Europe Chart Book

Inflation pressures mount as activity rebounds

Recoveries across Emerging Europe accelerated in Q2 as the easing of virus restrictions pushed GDP to, or above, pre-pandemic levels in most countries and we think this momentum will continue in Q3. However, the recovery has been accompanied by a marked increase in price pressures. Consumer and producer price inflation reached multi-year highs in July and shows no sign of letting up. We think inflation will fall only slightly in Russia and Turkey by year-end and will rise further above central banks’ targets in most of Central Europe. Interest rates are likely to be raised further in Russia, Ukraine, Czechia and Hungary and the risks are skewed to tightening cycles starting earlier than we currently expect in Poland and Romania.

26 August 2021

Latin America Economics Update

Brazil: could a savings drawdown lift the recovery?

We estimate that Brazilian households have ‘excess’ savings worth around 6% of GDP resulting from the pandemic. These should help to cushion consumer spending in the face of headwinds caused by rising inflation and unwinding fiscal support, but we think it’s unlikely that there will be a rapid drawdown of savings that would turbocharge the recovery.

26 August 2021
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