Tokyo - The International Monetary Fund (IMF) on Tuesday cut its
2012 forecast for Africa along with most other countries around the world as
the eurozone 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% from 5.4%. However, it revised up its 2013
outlook to 5.7% from 5.3%.
The fund said spillovers from the eurozone 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%
from a July projection of 3.3% mainly due to the impact from the continuing
eurozone debt crisis. It maintained its 2012 projection of 2.6%.
"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.
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