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.
William Jackson Chief Emerging Markets Economist
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Africa Economics Update

Debt sustainability in Zambia: mission impossible?

Zambia’s new administration has made encouraging noises about restoring macroeconomic stability and addressing the country’s public debt problem. But it will be a tall order to secure a large restructuring and stick to the fiscal consolidation that will be needed to leave the public debt ratio on an even keel.

2 December 2021

Africa Data Response

South Africa Manufacturing PMI (Nov.)

South Africa’s manufacturing PMI rebounded last month, but the emerging fourth virus wave and the threat from the Omicron variant has clouded the outlook for activity in the sector and the wider economy.

1 December 2021

Africa Chart Book

Omicron shines spotlight on low vaccine coverage

The emergence of the Omicron strain of COVID-19 reinforces the need to boost vaccine coverage in Sub-Saharan Africa from current low levels. Most countries have administered at least one vaccine dose to less than 20% of their populations. The South African authorities’ initial response to the ‘Omicron threat’ was to urge the take-up of vaccines, rather than tightening containment measures. And so long as vaccine coverage is low, the risk of intermittent curbs on activity to relieve strains in health care sectors will linger with future virus waves and variants. Achieving such vaccine coverage will probably take some time even as Africa’s vaccine supplies – including from China and India – look set to increase over the coming quarters.

30 November 2021

More from William Jackson

Latin America Economics Focus

A fresh look at Brazil’s public debt problem

Suggestions that Brazil’s government will raise welfare spending – and circumvent the spending cap in doing so – add to the evidence that there’s little appetite for the long-term fiscal squeeze needed to stabilise the public finances. Taken together with slower growth and higher interest rates, we think that the public debt-to-GDP ratio is likely to be on an upwards trajectory from next year. This feeds into our view that government bond yields will climb higher and that the real will weaken further from here.

20 October 2021

Middle East Economic Outlook

Gulf to outperform

Economic recoveries in the Gulf will continue to gather pace over the coming year on the back of successful vaccine rollouts and higher oil output, and our GDP growth forecasts lie above the consensus. Outside the Gulf, though, recoveries are likely to be slower, particularly in the more tourism-dependent economies. We think a sovereign default in Tunisia is more likely than not, and we have long-standing worries about public debt in Bahrain and Oman as well as Dubai’s corporate debts.

19 October 2021

Emerging Markets Economics Chart Book

Supply shortages take their toll

The supply shortages that have affected many DMs have also intensified in emerging economies over the past couple of months. The automotive sector has been hit hard by global semiconductor shortages, weighing on recoveries in Mexico, Czechia and Hungary in particular. More broadly, EM manufacturers are struggling to meet new orders, causing backlog of works to increase. Meanwhile, recent power shortages have weighed on recoveries in China, India and Brazil. As shortages continue, they are likely to not just weigh on growth, but also add to upward pressure to core inflation. That will probably keep central banks in Latin America and Central Europe in particular in tightening mode.

18 October 2021
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