SSA Economic Outlook - Q4 2013 - Review And Preview
BMI View: Sub-Saharan African economies are feeling the strain from lower commodity prices. In general, though, we remain upbeat regarding short-to-medium-term economic prospects. Over the coming 12 months, we will be keeping a close eye on new eurobond issuances, various political and economic risks in Nigeria and the direction of policy in Zimbabwe.
BMI's outlook for Sub-Saharan Africa (SSA) has been broadly stable since our last quarterly update, when we highlighted growing headwinds stemming from the slowdown in China and relatedly, lower commodity prices. Several countries will certainly feel the pinch: production at Guinea's Simandou iron ore mine has been pushed back as Rio Tinto instead focuses on core assets, and in Zambia, our Mining analysts anticipate that Western investment into the copper sector will be deterred by subdued prices.
Notwithstanding weaknesses in the external environment, SSA economies continue to post strong headline growth in general, and we expect this to remain the case over the medium term thanks to various factors including resource booms, broadly favourable demographic trends and ongoing infrastructural improvements. We forecast that SSA will post average economic growth of 5.5% in 2014 and 5.7% in 2015, outperforming all regions globally. Robust headline growth will belie widespread macroeconomic weaknesses, though. Most countries in the region will continue to run sizeable current account and fiscal account deficits, leaving limited buffers should there be any significant economic shocks.
|Buoyant Growth In The Face Of Headwinds|
|Sub-Saharan Africa - Real GDP Growth, % y-o-y|