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Washington - Sub-Saharan Africa will enjoy robust growth this year and in 2012, the International Monetary Fund (IMF) said on Monday. However, it urged monetary authorities to watch out for inflation from rising commodity prices.
In its World Economic Outlook report, the IMF cautioned that political turmoil in countries like Ivory Coast could dampen growth, while a sharper-than-expected pick-up in food and energy prices could affect the region's oil importing economies.
It kept its 2011 gross domestic product growth forecast for sub-Saharan Africa at 5.5%, and modestly raised its estimate for next year to 5.9% from 5.8%.
"Narrowing output gaps, alongside an incipient rekindling of inflation pressures by rising commodity prices, mean that policies to support demand are no longer appropriate except in a handful of economies," the IMF said.
"The focus of fiscal policy should therefore turn to medium-term priorities, while monetary policy needs to be increasingly alert to the inflation outlook."
It said while authorities need to guard against inflation from rising commodity prices, they should also consider targeted social safety nets to cushion the urban poor from high food costs.
Growth this year and in 2012 will largely be driven by low-income countries such as Ghana and Ethiopia, with oil exporters Nigeria and Angola also lending support.
The region's economic powerhouse South Africa will trail behind, with growth forecast at 3.5% this year and 3.8% in 2012 - insufficient to reverse the substantial job losses of the past two years, the IMF said.
South Africa and other middle-income countries in the region, whose output remained below potential, have room to continue with accommodative monetary policies, it said.
The South African Reserve Bank left its benchmark repo rate at 5.5% this month, after slashing borrowing costs by 650 basis points between December 2008 and December 2010.
Ivory Coast's power struggle between presidential claimant Alassane Ouattara and rival Laurent Gbagbo, which has killed hundreds, could cause the economy of the world's leading cocoa producer to shrink 7.5% this year.
"But beyond that, with as many as 17 national elections scheduled, activity in some countries could be hindered by related political unrest," the IMF said.
In its World Economic Outlook report, the IMF cautioned that political turmoil in countries like Ivory Coast could dampen growth, while a sharper-than-expected pick-up in food and energy prices could affect the region's oil importing economies.
It kept its 2011 gross domestic product growth forecast for sub-Saharan Africa at 5.5%, and modestly raised its estimate for next year to 5.9% from 5.8%.
"Narrowing output gaps, alongside an incipient rekindling of inflation pressures by rising commodity prices, mean that policies to support demand are no longer appropriate except in a handful of economies," the IMF said.
"The focus of fiscal policy should therefore turn to medium-term priorities, while monetary policy needs to be increasingly alert to the inflation outlook."
It said while authorities need to guard against inflation from rising commodity prices, they should also consider targeted social safety nets to cushion the urban poor from high food costs.
Growth this year and in 2012 will largely be driven by low-income countries such as Ghana and Ethiopia, with oil exporters Nigeria and Angola also lending support.
The region's economic powerhouse South Africa will trail behind, with growth forecast at 3.5% this year and 3.8% in 2012 - insufficient to reverse the substantial job losses of the past two years, the IMF said.
South Africa and other middle-income countries in the region, whose output remained below potential, have room to continue with accommodative monetary policies, it said.
The South African Reserve Bank left its benchmark repo rate at 5.5% this month, after slashing borrowing costs by 650 basis points between December 2008 and December 2010.
Ivory Coast's power struggle between presidential claimant Alassane Ouattara and rival Laurent Gbagbo, which has killed hundreds, could cause the economy of the world's leading cocoa producer to shrink 7.5% this year.
"But beyond that, with as many as 17 national elections scheduled, activity in some countries could be hindered by related political unrest," the IMF said.
