That compares to around 82 million people . All rights reserved. Instead, inflation is mainly driven by external factors, including global commodity prices and disruptions to global supply chains. The IMF's twice-yearly Regional Economic Outlook released on Friday warned that 123 million people, or 12% of sub-Saharan Africa's population, face acute food insecurity - where the lack of access to adequate food puts someone's life or livelihood in immediate danger - by the end of the year. This is something countries struggle with. Projections to 2050 show that much of sub-Saharan Africa will be unsustainable. Because of this, the growth momentum for the region has weakened this year with economic activity expected to expand by 3.8 percent. Company updates Fixed Income Equities Real Estate Focus of the Week . Unprecedented first wave of black middle class retirees in 20 years, COVID-19 heaps pressure on South African consumers across the board, Fairwork report highlights precarity of work in the gig economy, Panic buying underscores South Africa's inequalities. Growth is expected to slow this year by more than 1 percentage point to 3.6%, as a worldwide slowdown and a dramatic pickup in global inflation spill into the region. difficult sociopolitical and security situations at home. Inflation becomes the leading global concern in 2022 In sub-Saharan Africa, inflation has been driven less by domestic activity than in advanced economies. November 7, 2022. The decline was largely attributable to the prevailing inflationary pressures with the inflation rate for the month of June coming in at 7.9%, from the 7.1% recorded in . Last year, activity finally bounced back, lifting GDP growth in 2021 to 4.7 percent. , while also endeavoring to reduce vulnerabilities to future shocks, building resilience. Food accounts for roughly 40 percent of the region's consumption basketa measure of goods and services used to measure consumer price index (CPI) inflation. Inflation, GDP deflator (annual %) - Sub-Saharan Africa from The World Bank: Data 25 August 2022 Jordan Anderson Langelihle Malimela Martin Roberts Thea Fourie Theo Acheampong Inflation in developed economies and in the sub-Saharan African region has accelerated quite significantly. Chad's bilateral creditors said late Thursday that the country now did not need debt relief, given the surge in the price of crude oil, one of the country's major revenue earners. Rising food and energy prices are impacting the regions most vulnerable, and public debt and inflation are at levels not seen in decades. She advocates for interventions that targetthe most vulnerable in terms of food, and rethinking whether the tightening of monetary policy to combat higher inflation, a measure advanced economies are undertaking, is necessarily the best approach, given the resulting higher debt burden and lower growth from lower demand. Within this challenging environment, policymakers must confront immediate socioeconomic crises. \Looking ahead, the outlook remains highly . China is the obvious one, but there are others at the debt table, and what does that imply about the future of debt dynamics? "Inflation is this insidious, insidious tax on the poorest.". How do we save for tomorrow? Eyraud said. Within this challenging environment, policymakers must confront immediate socioeconomic crises as they arise, while also endeavoring to reduce vulnerabilities to future shocks, building resilience. Nov 3, 2022 Kaushik Basu. Instead, we do regular analysis specifically geared towards policy, so that when we engage with policymakers, it is evidence based.. This note analyses historical data, provides estimates of prudential savings needed to insure against future oil price shocks, and discusses policy options to prepare for the energy transition. Rising food and energy prices are impacting the regions most vulnerable, and public debt and inflation are at levels not seen in decades. "What worries us really is the fact that this is coming on top of all of the dislocation caused by the pandemic," the IMF's Abebe Selassie told Reuters this week. There is, however, a negative relationship beyond the observed. That compares to around 82 million people affected before the COVID-19 pandemic, but the hammer blow of the virus, spillovers from the war in Ukraine as well as worsening unrest and drought in parts of the continent have seen the numbers spiral. SSA's rapid growth, its integration with the global economy, changes in the policy frameworks, among others, in the last decade suggest that the drivers of inflation . Over the past year in the United States, there has been a 41 percent increase in energy prices and 30 percent increase in fertilizer. Tackling inflation while supporting growth and protecting the vulnerable therefore warrants careful and vigilant monetary policy tightening. The below table shows the IMFs GDP growth projections for each sub-Saharan African country: The regions recovery from the Covid-19 pandemic has been sharply interrupted, according to the IMF. Savings remain too low as countries juggle the weight of immediate needs. Price pressures in the sub-Saharan African region have risen since the outbreak of the Russia-Ukraine conflict. The main factors accounting for this unsustainability are: high levels of air pollution, poor sanitation, high . Please view the republishing articles page for more information. The Muddled Politics of US Inflation. A downturn in advanced economies and emerging markets, tighter financial conditions, and volatile commodity prices, have undermined last year's gains. Marijn Bolhuis and Peter Kovacs Sub-Saharan Africa faces one of the most challenging economic environments in years, marked by a slow recovery from the pandemic, rising food and energy prices, and high levels of public debt. Sub-Saharan Africa is witnessing a rapid development of digital currencies, and policymakers are weighing the benefits and risks of using these products to deliver financial services. Against this backdrop, and with limited options, many countries find themselves pushed closer to the edge. This note examines the drivers of food insecurity in the region and how countries have responded to the recent food and fuel price shocks. And even though the rise has been less dramatic than in other parts of the world, and the drivers are different, inflation is nearly double pre-pandemic levels, risking social and political instability and worsening food insecurity. In thecase of food, theprices of key staplessuch as maize and wheat have increased since 2019, contributing two-thirds of overall inflation in fragile states and one-half elsewhere in the region. Here are the Top 10 African Countries with the highest inflation rate in Africa in 2022, according to Statista Sudan - 245.1% Zimbabwe - 86.7% Ethiopia - 34.5% Angola - 23.9% Sierra Leone -. Dr Christine Makanza, a lecturer at the School of Economics, said: With the two major risks being food insecurity and debt unsustainability, how do countries manage fiscal consolidation, while trying to create cash transfers and safety nets to combat food insecurity?. Given sub-Saharan Africas fragile recovery, combined with the fact that domestic demand pressures have not so far been an important driver of inflation, policymakers must proceed with caution in coming months while closely monitoring inflation. Meanwhile, consumer prices rose 0.66% in . According to figures from the Ghana Statistical. Between 2012 and 2016, the South African Red Cross Air Mercy Service search-and-rescue helicopters in the Western Cape rescued more than 600 people in distress. It also cut the GDP growth forecast by 0.2 percentage points to 3.6%, a significant drop from the 4.7% expansion in 2021, and has said Nigeria, Ghana, Ethiopia, Malawi, and Zimbabwe may all need . Creative Commons Attribution-NoDerivatives 4.0 International License, UCT GSBs Executive MBA ranked among top 20 in the world for student satisfaction, Alumni start-up amplifies online education access, Department of Medicines 47th annual research symposium: a celebration of science. This comes at a time when debt in Sub-Saharan Africa is projected to stay at 58.6 per cent of GDP in 2022. "Anything that exceeds what is a reasonable ask of the Zambians would be unfair to the people of Zambia," Selassie added. It finds that central bank financing of government does . The table has current values for Inflation Rate, previous releases, historical highs and record lows, release frequency, reported unit and currency plus links to . "Whether in Europe, where inflation has hit a record high of 10 percent, or sub-Saharan Africa, where food prices have surged by nearly 24 percent, household budgets across the world are being stretched beyond breaking point," he said. Nigeria REUTERS/Rogan Ward. In its latest "Regional Economic Outlook for Sub-Saharan Africa", the Washington-based fund projected that the region is likely to grow by 3.6% in 2022, down from 4.7% in 2021, given muted investment and overall worsening of its balance of trade. October 14, (THEWILL) - Sub-Saharan Africa's economic activity is expected to slow significantly in 2022 and remain relatively modest in 2023. Last year, activity finally bounced back, lifting GDP growth in 2021 to 4.7 percent. The tentative recovery the sub-Saharan region (SSA) enjoyed in the wake of the pandemic is set to teeter into retreat as global economic instability impacts key vulnerabilities within the region. The IMF Press Center is a password-protected site for working journalists. How do you build buffers when facing high inflation and debt, and dwindling growth. It was Tuesday, October 4, 2022 in WASHINGTON, D.C., at the institution's headquarters. FOSTER OPENNESS AND OPEN SOCIETIES The United States has an abiding interest in ensuring the region remains open and accessible. Food security across sub-Saharan Africa stands among this generation's greatest challenges, a crisis that continues to worsen amidst this economic downturn and will ultimately underpin further humanitarian struggles without dedicated and full-scale intervention. Sub-Saharan Africas recovery has been abruptly interrupted. He warned that more African countries might need to restructure their debt. How we made it in Africa is published by Maritz Publishing CC. While there are big differences between countries, the median of inflation rates in the region increased to almost 9 percent in August. . The publisher's permission is required to reproduce the contents in any form. While, 17 countries had double-digit inflation as of July 2022. There are concerns that the IMF comes in and imposes draconian measures, said Cathy Patillo, the deputy director of the IMFs African Department. Brave new world: who is doing the lending? The same applies to countries where monetary policy credibility is weak, the currency is depreciating rapidly, or foreign exchange reserves are shrinking. Progress has been painfully slow. Three major global developments are reshaping sub-Saharan Africas outlook: the slowdown in advanced economies and emerging markets, tightening global financial conditions, and volatile commodity prices. Inflation as measured by the consumer price index reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly. For sub-Saharan Africa's 14 wheat producing countries, the uncertainty of fertiliser supplies imported from Russia is a major concern. By embedding this news article on your site you are agreeing tothe University of Cape Town's terms of use. Instead, external developments have shaped the path of inflation since the start of the pandemic. However, Virg Frizs, emerging markets economist at Capital Economics, said clouds over sub . Sub-Saharan Africa is the most food-insecure region in the world. Pressures on household incomes will remain predominant. Meanwhile, the trend pointed up, with annual average inflation coming in at 5.4% in September (August: 5.0%). This page provides values for Inflation Rate reported in several countries part of Africa. Slowing food and oil prices could lower inflation in the coming months, although the downward trajectory is slow and starting from very high levels.
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