TOKYO Oct 9 (Reuters) – The International Monetary Fund on
Tuesday cut its 2012 forecast for Africa along with most other
countries around the world as the euro zone crisis dampens
global demand and higher food prices weigh on food-importing
countries in the region.
In its latest World Economic Outlook, the IMF shaved its
2012 projections for Africa to 5 percent from 5.4 percent.
However, it revised up its 2013 outlook to 5.7 percent from 5.3
percent.
The Fund said spillovers from the euro zone crisis into
Africa have so far been modest except for South Africa, which
has close financial and trading ties with Europe.
The IMF cut its 2013 forecast for South African growth to 3
percent from a July projection of 3.3 percent mainly due to the
impact from the continuing euro zone debt crisis. It maintained
its 2012 projection of 2.6 percent.
“If the euro area crisis escalates further and global growth
slows further, Sub-Saharan Africa’s prospects will be less
favorable,” the IMF said.
“South Africa, strongly linked to Europe, would be
particularly affected, with possible repercussions for some
economies in southern Africa,” the Fund said, “Softer commodity
prices would adversely affect the region’s natural resource
exporters,” it added.
The IMF cautioned that African countries could also be hit
if China’s economy slowed sharply. China’s economic growth is
expected to be the lowest in more than a decade this year.
Increasing Chinese foreign direct investment and government
funding to African countries has made it an important player in
the region.
“The priority in much of the region is to continue to
strengthen policy buffers and prepare contingency plans if
downside risks materialise,” the IMF added.
(Reporting By Lesley Wroughton; Editing by Neil Fullick)
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