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Lagging behind

Vaccination campaigns across Sub-Saharan Africa will continue to struggle, leaving the region vulnerable to renewed virus outbreaks. This, combined with tight fiscal policy, a slow return of tourists and falls in commodity prices means that economic recoveries will lag behind those in other parts of the world. GDP across most of the region is likely to stay well below its pre-crisis path over 2021-23.
William Jackson Chief Emerging Markets Economist
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Africa Economics Weekly

SA corruption and inflation on display, Ghana’s troubles

The president of South Africa and the ruling ANC are taking the heat as corruption accusations fly. With political bickering likely to grow, the focus on boosting the economy with much-needed reforms is likely to take a backseat. Meanwhile, we think that the latest inflation reading out of South Africa will shift the debate on the scale of further monetary tightening towards 75bp steps. And in Ghana, policymakers appear to be stepping up efforts to support the cedi but at the risk of adding to the economy's pain.

24 June 2022

Africa Data Response

South Africa Consumer Prices (May)

The rise in inflation in South Africa to an above-target 6.5% y/y in May is likely to shift the debate to a choice between a 50bp and a 75bp hike to interest rates at July’s MPC meeting. But inflation continues to be driven by food and energy price effects and, if the headline rate falls sharply over the rest of this year as we expect, interest rates will probably be raised by less than investors anticipate over 2022-24.

22 June 2022

Africa Economics Update

Where next for inflation in South Africa?

Inflation in South Africa has been close to the top of the central bank’s target range in recent months, but the country has avoided the surge in inflation seen across much of the world. And there are reasons to think that the headline rate will drop back sharply by the end of this year. That underpins our view that monetary policy will ultimately be tightened by less than investors currently expect.

21 June 2022

More from William Jackson

Latin America Economics Update

Brazil: further hikes in store as inflation concerns build

The hawkish statement accompanying yesterday’s 100bp rate hike by the Brazilian central bank (to 5.25%) means that the Selic rate will increase further than we had anticipated. We now expect it to be raised to 7.50% by year-end (previously 6.50%).

5 August 2021

Latin America Data Response

Brazil Industrial Production (Jun.)

The stagnation in Brazilian industrial production in June suggests that industry made a negative contribution to q/q GDP growth over Q2 as a whole. But with virus cases having fallen sharply, it looks like the prospects for industry – and the economy more generally – are brightening.

3 August 2021

Latin America Data Response

Mexico GDP (Q2 Prov.)

The re-opening of Mexico’s economy caused GDP growth to accelerate to 1.5% q/q in Q2, and we suspect that this preliminary figure will be revised up. But with new virus cases rising sharply, the economy is likely to slow in Q3.

30 July 2021
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