New forecasts for Africa amidst the Iran war

As the conflict in the Middle East rumbles on, we’ve adjusted our key macroeconomic forecasts for Sub-Saharan Africa. There are a few countries that stand to benefit from the sharp rise in global energy prices, notably Nigeria and Angola, where we now expect faster GDP growth than before. But we expect softer growth and higher inflation elsewhere. The economies in East Africa are particularly vulnerable and the longer the war drags on, the more likely that governments there will need to resort to drastic measures to curb energy demand. As for South Africa, figures this week added to the sense that its economy was in decent shape coming into the energy shock. The Reserve Bank will probably stay on the sidelines at its meeting next week and rate hikes are only likely in an adverse scenario.