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South Africa is unlikely to retain its growth momentum beyond 2022, according to the International Monetary Fund, despite perhaps hitting 5% growth in 2021, up from 4% previously (IMF).
A study on the regional economic outlook for Sub- Saharan Africa was released by the global agency on Thursday. According to Abebe Aemro Selassie, director of the IMF’s African Department, the area is predicted to increase by 3.7 percent in 2021, the slowest recovery in the world.
Advanced markets, on the other hand, are expected to increase by more than 5%, while emerging markets and developing countries are expected to rise by more than 6%. “This mismatch reflects sub-Saharan Africa’s slow vaccine rollout and stark differences in policy space,” said Selassie.
According to the IMF, the third wave that hit the region has increased to triple or quadruple the level seen in January. Vaccination efforts in the region are lagging behind those in other parts of the world, owing to wealthy economies’ hoarding, export restrictions imposed by major vaccine manufacturers, and high demand for booster injections in advanced economies.
According to the report, only 3% of the population in Sub-Saharan Africa has been vaccinated, compared to vaccination rates of up to 60% in advanced and many emerging market nations. Real per-capita income would likely stay about 5.5 percent below pre-crisis levels.
Advanced economies, on the other hand, are likely to return to their “pre-crisis pace” by 2023.Civil turmoil in July, as well as the third wave of Covid-19, dragged on the economy in South Africa, one of the region’s two largest economies (the other being Nigeria).
“With the pace of structural reforms expected to remain limited and the faster-than-expected rebound in 2021, South Africa will be constrained in its ability to sustain the 2021 growth pace, so growth is expected to slow to 2.2% in 2022,” the report read.
Story by : Norvisi Mawunyegah